Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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Here's what you need to know...

When a friend is nice enough to let you borrow their car, the last thing you want to think about is having an accident.

Most of the time, friends borrow cars and return them back in one piece without any hiccups. Unfortunately, you can never predict when you’re going to have an accident.

If you’re not covered to drive the vehicle, an accident could become the end of your friendship. You should always prepare for the worst and hope for the best when you’re borrowing property.

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This is why it’s important to learn how insurance works before you get behind the wheel of a car that you don’t own. Here’s a guide to help you plan ahead to ensure that both you and your friend are protected:

Is it my legal responsibility to insure a car that I’m borrowing?

If auto insurance is mandatory in your state, it’s the vehicle owner’s responsibility to insure any car that’s licensed to be driven on public roads and highways.

Since the owner must pay for damages that their property causes, the burden to buy insurance lies on their shoulders and not the person who’s operating the car at the time of a loss.

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Does insurance follow the car or the driver?

There’s a widespread debate about car insurance and whether it follows the car or the driver listed on the policy.

While some people believe insurance follows only the car or only the driver, there are scenarios where the coverage will follow each. It’s important to understand this when you’re going to borrow a car.

When it comes to liability insurance, the coverage follows the driver.

Anyone who’s listed or qualified as an insured under the policy will have liability protection to pay for third-party damages when they’re driving a covered auto, a borrowed car, a temporary substitute, or a rented car.

When does car insurance follow the car?

If the owner of the car has comprehensive and collision coverage on the car, this first-party coverage is tied to the vehicle.

Anyone who lends their car to someone for a short period of time is also lending their physical damage insurance. As long as the driver who’s operating the car at the time is considered a permissive user, the damage will be paid for.

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What is a permissive user under a standard auto insurance policy?

Not everyone is considered a permissive user. Under your contract, a permissive user is defined as someone who has been given permission to drive the car by the vehicle’s owner.

The driver must have a license and can’t live in the household to qualify for the coverage extension. Many companies won’t cover drivers who aren’t listed on the policy but who have regular access to the car.

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Will my insurance pay for damage in an accident when I’m borrowing a car?

If you already have your own existing insurance, your insurance may pay for claims that you make when you’re driving another car. As previously stated, your liability coverage follows you when you’re driving your car and non-owned cars.

Because of this, you can fall back on your liability limits if the car’s insurance carrier won’t cover you.

Your physical damage coverage is another story. If you have comprehensive and collision insurance, it typically follows the car, but there is a provision that says that it will pay for damage in a temporary substitute auto.

Temporary autos are those being used when your covered auto is being repaired, serviced, or when it’s not available because of a loss.

Whose insurance pays first?

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If you rarely borrow your friend’s car and you are a permissive user, the car’s insurance will pay first when you present liability or damage claims.

If the limits are exhausted or there’s no coverage for repairs, your insurance will kick in and pay the remainder of the damages as long as your limits aren’t exceeded.

When a claim is denied, your insurance will become the sole benefit to make a claim against. This is also true when victims in the accident sue the driver and decide not to go after the owner. This happens when the claimant can prove damage sustained was because of an intentional act.

If you don’t have insurance and you want to protect your finances, it’s best to apply for your own standard or non-owner’s car insurance policy.

Make sure to shop around to find the best rates before you decide on a specific insurance plan. Use an online quote tool, compare prices, and get coverage today.

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