When you borrow someone else’s automobile, which has full coverage and allows permissive use, you are insured under the owner’s policy for liability and physical damages to the vehicle you are driving. If the borrowed car doesn’t have sufficient coverage, your own auto insurance policy usually pays for damages and injuries to other people when you are at fault but doesn’t pay for damages to the car you were driving.
First of all, vehicle owners must make sure their insurance includes any driver they will allow behind the steering wheel for liability and damages to the auto. It would always be the first in line to compensate any losses regardless of the position with the policy of the person who was operating the automobile at the time of the incident.
Usually standard policies include driving someone else’s auto. However, they provide secondary auto insurance coverage and only kick in when the owner’s Liability limits are insufficient or nonexistent. But it would be primary when there is a direct and personal claim against you because third parties think you were grossly negligent in the crash.
They don’t usually compensate damages to the vehicle operated. Liability follows the driver but Collision and Comprehensive usually doesn’t follow in similar cases but it may for rental cars.
If you don’t have a vehicle, you can still buy non-owners vehicle insurance for the liability occurring as a result of you crashing a car that doesn’t belong to you. Again, it would be secondary when the car is already covered. It can also be used when renting a vehicle.
In any case, the keeper of the vehicle should have sufficient auto insurance cover in place before handing over the keys. They cannot escape responsibility for the damages and injuries caused to third parties when they permit someone else to drive their vehicle and they may be sued for the damages if they don’t have coverage for whatever reason. It is their automobile and they need to account for anyone who has access to it.
In addition, this incident will be recorded as a claim on the owner’s vehicle insurance policy, even though someone else was responsible for it. Usually there is no deductible for Liability but they need to pay it for a Collision claim. That is why people need to consider the consequences of lending automobiles beforehand.
The same applies to you when lending your car to a friend. Normally, standard car insurance includes occasional users. However, you should check that you don’t have special conditions or exclusions preventing this. Some policies only allow listed people in return for lower premiums. Besides, you need to check what is considered to be occasional use. If you have a houseguest staying for a few weeks and they will have full access to the vehicle during their stay you may be required to inform your insurer and pay a little extra premium.
As a general rule, people living under the same roof should be listed on the schedule. Most companies like to know about them and make an adjustment for the likelihood of them getting their hands on the car keys. They may not even be related to you in any way for them to be considered part of the household. So, it is best to disclose the full list. Maybe, they end up using the automobile even though it was never intended. In such cases, you do not want to be arguing with the insurer.
When you rent a car, your standard auto insurance policy provides the same coverage you have for the rental car as well, providing they are similar types of cars and you didn’t rent a sports car.
It is important to note that motorists should check they have a standard policy with permissive use inclusion and not a policy which is restrictive as to who can drive your vehicle. In any case, it is advisable to check the exact position by either looking at the policy or asking the agent or the insurer because interpretations and rules change depending on the company and state.