Rule #1: Anyone Living in Your House is Usually Covered Unless They Are an “Excluded Driver” On most insurance policies, any licensed driver in your house can drive your vehicle unless the policy expressly excludes them. This is because most policies require you to list all the drivers in your house, so they are covered within your policy. You may, however, have excluded a licensed driver in your house because of various reasons, such as a poor driving record. These drivers will not be covered in the event of an accident.
Rule #2: “Permissive Use” Covers Occasional Use by Other Drivers For those cases that a friend or family member who is not part of your household needs to use your car, permissive use will usually apply. It’s important to know that permissive use means that you are giving that driver permission to take your car and they will be covered by your insurance.
Rule #3 Car Insurance Follows the Car It’s a common misconception that car insurance follows the driver. In fact, car insurance covers the vehicle. This means that your own policy will provide coverage for another driver, not theirs. The other driver’s insurance acts as excess insurance in case yours does not fully cover the accident; however, your insurance is the primary insurance. Here’s an example: You lend your truck to a friend for a day so that they can move out of their apartment. Your friend accidentally backs into another car and damages their vehicle. Since your truck has primary coverage, you are the one who is liable and will need to:
File an insurance claim with your company
Pay the deductible
Accept insurance rate hikesIf your insurance can’t fully cover the damage to the other vehicle, then your friend’s insurance will step in and cover the rest.
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