Does My Own Insurance Go Up if I Crash Someone’s Car?

When you are involved in an accident while driving someone else’s vehicle and their insurance policy pays for the damages, the claim will typically be filed under their policy. This can affect their insurance rates for a certain period, usually 3 to 5 years, depending on their insurer’s policies and the specific circumstances of the accident. While the claim itself may not be noted on your own insurance policy, the accident could still impact your driving record.

Most insurance companies check the driving records of individuals before offering new quotes or renewal terms. If the accident appears on your driving record, it could potentially lead to higher premiums or even affect your eligibility for coverage when you’re seeking new insurance or renewing your current policy.

There are multiple avenues through which individuals can have insurance for operating another person’s vehicle. One prevalent method involves being included in the policy of the vehicle’s owner, a situation commonly observed among spouses and individuals sharing the same residence. Alternatively, when individuals drive an insured vehicle with the owner’s consent, they are generally covered by the owner’s insurance policy.

In both scenarios, the owner’s insurance coverage would be responsible for covering any damages and liability claims, up to the limits outlined in the policy. Should the owner’s policy fail to fully address the liability claims, the driver’s personal insurance policy might step in as secondary liability coverage to bridge the gap. Consequently, this would impact two separate insurance policies.

Let’s assume the vehicle owner’s policy fully covers the damages. In this scenario, the insurance policy of the driver responsible for the accident remains uninvolved, and the claim is processed through the owner’s policy. As a result, the owner’s auto insurance rates could be affected for several years due to the incident.

Even if the at-fault driver’s own insurance company isn’t directly involved in processing the claim for the accident, they may still choose to increase the at-fault driver’s insurance rates because the accident is considered their fault. This decision is based on the principle that the driver’s responsibility and risk profile have changed due to their involvement in an accident, regardless of whether their insurance company handles the claim.

It’s important for policyholders to notify their insurance providers about any accidents they are part of. Even if the policyholder doesn’t report the incident, accidents can still be documented by law enforcement or other individuals, ultimately finding their way into the Motor Vehicle Records of all drivers involved.

In the scenario described above, the car owner’s insurance provider, which covered the claim, would record the accident in the Comprehensive Loss Underwriting Exchange (CLUE) report, a database managed by LexisNexis. This information becomes accessible to other automobile insurance companies when they review your records for renewal considerations or when you request a new quote. The fact that you were at fault in an accident involving someone else’s vehicle would be taken into account by these insurers, potentially influencing the calculation of your premiums based on this disclosed information.

Having an at-fault accident on your driving record can lead to an increase in your car insurance premiums, regardless of whether you or someone else’s insurance covered the damages. This incident serves as a clear indicator of your driving skills and risk profile. Even if your current insurance provider didn’t impose a surcharge for the accident, the fact that the accident is now on your record could result in the loss of any good driver discounts you might have previously received, as you are no longer considered accident-free. The presence of an at-fault accident on your driving history can have lasting impacts on your insurance rates and discounts.

A crash for which you are at fault can find its way onto your driving records, visible to all auto insurers when you apply for coverage. Consequently, it has the potential to influence your own vehicle insurance policy premiums, even if the actual claim was settled by someone else’s insurance and is recorded under their policy.

To sum it up, the owner of the vehicle will likely experience a premium increase due to the claim made on their policy and the subsequent payout by their insurance company. Meanwhile, you, as the at-fault driver, might also face a premium increase because you were responsible for the accident and your own insurance policy could be affected accordingly.