How does auto insurance work if I let someone else use my car?
Updated: Feb 28
You’re visiting family, they ask you if you would run down to the grocery store to pick up some dinner. You grab their keys and on the way you accidentally bump into another car in the parking lot. Whose insurance information do you exchange with the owner of the other car? Before we answer that question it’s first important to understand Permissive Use.
Permissive use in an auto insurance policy means that you are giving a person, who is not named on your policy or a household member, permission to drive your car.
In our example, you would have been given permission to drive a covered auto. It's important to know that not all carriers cover permissive use so talk to your agent to make sure you understand who is and who is not covered on your policy.
If you have your own auto insurance, it’s possible that your policy will cover any damages, but that’s not guaranteed.
Permissive use starts to become more complicated when we talk about who you can and cannot give permission. Below is an example of who we may grant permissive use:
A family member who does not live with you and has their own insurance
A friend who does not live with you and carries their own insurance
Simply, anyone who does not live with you, has their own insurance, and will not operate your vehicle on a regular basis.
So now let’s have a look at those who we cannot give permissive use:
An unlicensed driver
A household member
Any driver who may operate your vehicle on a regular basis
It’s also important to note that you want to make sure that you list all household drivers on your policy. Failure to do so could result in a claim being denied. You should either include them on your policy or exclude them and restrict them from operating your vehicle.
So now you might be wondering if your policy will cover you for driving someone else’s car. Short answer, sometimes. This is largely up to your particular state, carrier, and situation.
In general, auto insurance will usually cover the car regardless of who is driving assuming you’ve granted permissive use. Below are the coverages listed on your policy that would cover you in the event of an at-fault accident in someone else’s car:
Comprehensive and Collision – this coverage will cover damages to the insured vehicle and will work as intended even on a vehicle you have permissive use authorization.
Roadside Assistance – is typically covered by the vehicle owner’s policy
Rental Reimbursement – is typically covered by the vehicle owner’s policy
Personal Injury and Medical Payments – is typically covered by the vehicle owner’s policy
Liability – this is the primary coverage required on all vehicles and is typically covered by the vehicle owner’s policy with the same restrictions. Your policy could come into play if the vehicle’s policy limits have been reached.
Back to our original question. So whose insurance information should you exchange or present? In general, you would exchange policy information of the vehicle you are driving. In fact, I would also recommend you collect policy information from the driver as well in the event the vehicle is uninsured or underinsured.
Finally, all accidents are recorded and regardless of which insurance company picks up the tab, you are still the operator of that vehicle and consequently your motor vehicle report will be affected and may result in higher premiums at renewal.
No one likes surprises when it comes to insurance so don't wait for a claim to review your insurance policies. We offer complimentary reviews and if you like your coverage but not happy with your agent, well, we can help you too.
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