We get it, there are lots of good reasons to lend your car to a friend or family member, but what happens if they get into an accident? The good news is that car insurance often follows the car, not the driver—but there are some important details you need to know before lending your car to your neighbor, or your friend who’s back in town visiting from college.
Here’s how car insurance works for other drivers and what you need to check before handing over your keys.
TL;DR
- Your car insurance usually protects your car if you lend it out to a friend.
- Coverage depends on factors like whether the driver has your permission, what coverages you have on your policy, and how frequently that person is driving your car.
- If someone lives with you or uses your car regularly, they need to be added as an additional driver on your policy.
When does my car insurance cover other drivers?
Car insurance usually covers other drivers, depending on whether they have your permission to drive your car and the type of policy you have.
If someone is listed on your policy, they’re automatically covered to drive your car. Let’s take a look at who should usually be listed on your policy:
- Spouses
- Teenage children
- Roommates (if they use your car regularly)
- Children in college
- Live-in significant others
- Parents (if you live with them, or if they use your car regularly)
- Other family members, like siblings or cousins (if you live with them, or they use your car regularly)
Most insurance companies also cover people who aren’t listed but have your permission to borrow your car temporarily, like a friend who uses your car one time to run an errand while their car is in the shop.
Let’s take a look at how car insurance might cover another driver:
Imagine your car insurance policy has collision coverage with a $500 deductible, and that you chose a $25,000 limit for your property damage liability coverage. If your cousin comes for a short visit from out of town and accidentally rear ends another driver while borrowing your car, damaging both cars, here’s what happens in the case of an eligible claim:
If your cousin caused $5,000 worth of damage to the other driver’s car, and your coverage limit for property damage liability is $25,000, your insurer could cover the full $5,000 worth of damages. Now, if the damage costs had been $30,000 and exceeded your policy limits, your cousin’s insurance could step in to cover the remaining $5,000, assuming they have their own policy.
Your car repairs would be covered by your collision coverage can, after you pay the $500 deductible.
Remember, filing a claim can lead to higher premiums at renewal, even if the damage was caused by someone else.
When does car insurance not cover other drivers?
Car insurance doesn’t cover other drivers when they didn’t have your permission to drive your car, or drivers who should have been listed on your policy (like someone who lives with you or regularly uses your car).
Imagine this: Your roommate has a driver’s license but doesn’t own a car, so you let them borrow yours to run errands a few times a week. One day, while backing out of a parking spot, they accidentally bump into another car. If they aren’t listed on your insurance policy, your insurer might deny the claim since you live under the same roof and they’ve been using your car regularly.
Coverage exclusions can vary by insurance company and state laws, so it’s important to check your specific policy. If a driver isn’t listed on your auto insurance, and is using your car frequently, they’d need their own insurance to pay for damages.
How does my car insurance cover other drivers?
If another driver who’s listed on your policy, or someone who occasionally drives your car with your permission, gets in an accident while driving your car, your insurance can cover damages they may cause.
Here’s a closer look at how different types of coverage work when others get behind the wheel of your car:
Collision coverage
Collision coverage helps pay for repairs to your car if the driver causes an accident with another car or stationary object (like a fence, highway divider, etc). For example, if a friend borrows your car and accidentally backs into a pole, collision coverage could help cover the repair costs. The typical coverage amount is up to your car’s actual cash value, minus your deductible (usually between $250 and $1,000).
Comprehensive coverage
Comprehensive coverage helps cover the costs for things that aren’t technically car accidents. For instance, your best friend borrows your car, and while the car is parked in their driveway, a hailstorm hits, causing damage to your car. Comprehensive coverage could help pay for the repair costs. The amount covered is based on your car’s actual cash value, minus your deductible which is usually between $250 and $1,000.
Liability coverage
Liability coverage protects against damages or injuries the driver causes to other people and their property in an accident. For instance, if someone driving your car rear-ends another car, liability insurance can help cover the other driver’s medical bills and car repairs related to the accident. The coverage amount depends on your policy, but state minimums often require $25,000 per person and $50,000 per accident for bodily injury.
Coverage for medical expenses
When it comes to covering medical expenses after an accident, both personal injury protection (PIP) and medical payments coverage (MedPay) can play a role, but they work in slightly different ways.
PIP is designed to cover medical costs, lost wages, and rehabilitation expenses if the driver of your car is injured in an accident, regardless of who is at fault. This coverage is typically required in no-fault states, with limits ranging from $10,000 to $15,000, while in other states, it may be optional or not available at all.
MedPay, on the other hand, focuses specifically on medical expenses, such as doctor visits or ambulance costs, also regardless of fault. It generally provides smaller coverage amounts, usually between $1,000 and $10,000, and does not cover lost wages or extended rehabilitation like PIP does. Unlike PIP, MedPay is usually optional, while PIP is mandatory in certain states.
Most insurers provide the option to include either PIP or MedPay, but not both. The availability of these coverages depends on your state and whether they are legally required.
What should I do if my car is damaged when someone else is driving it?
Assuming the other driver is a listed additional driver on your policy or has your permission to drive your car, here are some general steps to take if that driver is in an accident while driving your car:
- Make sure everyone’s safe: If someone lets you know they’ve been in an accident in your car, make sure everyone is safe. Have them call 911 if needed, especially if there are damage or injuries.
- File a police report: For theft, vandalism, or major accidents, you usually need a police report to file an insurance claim.
- Document the incident: Make sure they take photos of the damage, collect names and insurance information, and gather details from any witnesses. This evidence is essential for filing a claim.
- Get the driver’s information: While you’re close enough to lend them your car, you probably don’t have some of the details you’ll need to submit a claim, like their drivers license number and their car insurance policy number.
- Contact your insurer: Notify your insurance company about the accident as soon as possible, and file your claim.
At Lemonade, we designed our digital claims process to be as quick and easy as possible. Just submit your claim through the app with the help of our chatbot, AI Jim, then you’ll be paired up with one of Lemonade Car’s claims advocates to help you with the rest of the process.
What makes Lemonade the ideal choice for households with multiple drivers?
Easily add drivers to your policy
At Lemonade, you can list up to seven drivers on your insurance policy, depending on your state, and adding friends or family members who regularly drive your car to your Lemonade policy is quick and easy using our app. Not doing this could lead to uncovered claims, so why risk it?
Affordable coverage
At Lemonade, each driver on your policy can help score discounts on your car insurance for practicing safe driving habits—including keeping a safe distance and limiting night driving.
Real-time policy adjustments
Need to make changes? Adjust coverage limits or exclude drivers on the Lemonade app at any time. Flexible options make sure you’re protected when sharing your car, and you keep control over your policy.
Before we go…
Understanding how your car insurance covers drivers is key to lending your car responsibly and avoiding unexpected costs. Remember, permission and how often you’re lending your car are critical factors in determining coverage.
Need coverage designed around your needs? Click below to start your free quote today.
FAQs
Does car insurance cover unlicensed drivers who borrow my car?
No, unlicensed drivers are never covered under your car insurance policy, unless they have a valid learners permit. Anyone borrowing your car has to have a valid driver’s license or learners permit to be eligible for coverage.
What happens if the person I lent my car to has their own insurance?
Usually, your policy is the first to pay for damages in the event of an accident with your car. This means your insurance will cover costs up to the limits outlined in your policy. If the damages exceed these limits, the driver’s own insurance policy may step in to cover the remaining expenses, depending on their coverage terms.
Can someone use my car for ridesharing if I have car insurance?
Standard car insurance policies usually don’t cover commercial activities like ridesharing or delivery services. If your friend or family member plans to use your car for this kind of thing, they’ll need to get additional ride-share insurance or a specific commercial insurance policy.
Without this coverage, any accidents or damages during ridesharing activities probably won’t be covered.
Do I need to notify my insurance if someone borrows my car?
For one-time borrowing, it’s not necessary to notify your insurer as long as your policy allows permissive use. But for long-term borrowing or regular use, you should add the person as an additional driver on your policy. This way, there’s no confusion or denied claims if an accident occurs.
Does my car insurance cover my child once they get their license?
Yes, but you’ll need to list them as a driver on your policy to ensure they’re covered. Keep in mind, adding a new driver—especially one with little to no driving experience—can increase your premiums.
A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage and discounts may not be available in all states.
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