In the old days, many vehicle owners took the details of their insurance policies for granted. It used to be “no big thing” to allow somebody else to take off in your car, but nowadays, some insurance companies are warning that it’s best to be cautious in handing over the car keys. In reality, the question of coverage for car borrowers falls into a kind of gray area within the insurance industry. It’s not always a cut and dried equation. Here are some of the details about when your friend or relative will be covered if they have an accident while driving your car.
Covered and Non-Covered Drivers
The short answer to the question is that in order to be covered on a policy, a driver needs to be formally signed on to that policy. In the vast majority of situations, spouses are jointly signed onto policies. Children in a family need to be added to the policy when they start to drive, which is often extremely expensive, because younger drivers are considered a higher risk. Outside of that, non-covered drivers may be covered in the event of an accident, provided they are not considered ‘regular’ drivers. What is a regular driver? Some insurance resources such as this one from AllState go over some of the details around “occasional” coverage. For example, an insurer may consider a regular driver to be someone who uses a vehicle more than once a month, or more than 12 times per year. This raises all kinds of questions for policy holders, because the rules and limitations are a little vague. But there are also some other issues that can come up around a situation where someone has an accident or gets the ticket behind the wheel of someone else’s car.
Court Situations and Other Details
The way that insurance claims or court cases work out for non-covered drivers can also vary depending on the state that the vehicle is registered in. States have no-fault insurance use personal injury protection or PIP coverage to pay out to accident victims. That means that the coverage is provided regardless of who caused the accident. But even in no-fault states, there can be problems with that occasional driver who is not specifically covered on a policy. In some cases, a driver who has borrowed someone else’s car will encounter problems in a local court, where a judge may consider even occasional non-covered use to be illegal or a violation of some legal principle. That can cause additional problems for the vehicle owner and the person who was driving. In addition, there’s also the “investigative” aspect of claims. Suppose someone gets in an accident with a borrowed car, and generates a claim. The vehicle owner might be surprised to find that insurer reps have scoured his or her Facebook or social media accounts for “incriminating” evidence that the borrower was a ‘regular user’ rather than an ‘occasional’ one.
Keeping in Touch with Insurers
Because of the gray area here, and because the details of these policies change according to the insurance company, the bottom line is that the vehicle owner should always be in communication with the insurer before making decisions about loaning out a vehicle. This will take a lot of the guesswork out of the equation and put everyone’s mind at ease.
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