If you've considered loaning your car to someone, you may be wondering: Does car insurance cover the driver of the vehicle, or the vehicle itself? Does an insurance policy automatically cover everyone who lives in the car owner’s household? Can you keep your insurance from covering risky drivers who happen to live with you? Do you need to purchase extra coverage for friends who plan to drive your vehicle?
It's important to know who is insured to drive your car before you let them drive it. If you are ever in doubt, ask your insurance agent before you let someone drive your car.
Who Needs to Be Listed as a Driver?
First, you should know who is supposed to be listed on your car insurance policy. Some insurance carriers are stricter than others when it comes to who needs to be listed as a driver. These irregularities in requirements can make the whole process quite confusing. However, you must find your carrier's requirements, because it could cause problems if you knowingly did not list a driver who was expected to be listed.
Most insurance carriers expect the following people to be listed as a driver on your policy:
- Licensed family members living in the household
- Unrelated licensed drivers living in the household
- Anyone driving your vehicle and not insured under another policy
In general, you should include everyone in your household as a listed driver so that they can be covered by your car insurance.
Automatically Covered Drivers
Some drivers will be covered under your policy as long as you have given them permission to drive your car. This is considered "permissive use." These drivers may include immediate or extended family, friends, or even a boyfriend or girlfriend who doesn't live with you.
When you give someone permission to drive your car, your car insurance will be the primary insurance if an accident were to happen, with the driver's insurance secondary.
What If You Live With Risky Drivers?
Sometimes, you may be concerned about the expense of adding a risky driver who lives with you.
Say, for example, your best friend just moved in with you. You love hanging out with them—you just don't love their driving record. This new roommate doesn’t currently own a car, and so you let them drive yours. Adding your friend as a driver to your policy could raise your rates considerably, due to their bad driving record, so you try to get around it by not adding them to your insurance as a driver.
However, you are taking a gamble in allowing someone living in your household to drive your car without listing them as a driver.
Depending on your insurance carrier's rules, it's possible a claim could be denied if you intentionally didn't disclose to your insurance company a household member with a risky driving record.
In some states, some policies would cover a claim with your roommate as the driver under "permissive use," but you could run into trouble if you didn't give that person permission to use your car. If they get into a wreck and don't have insurance, you're probably still liable for the damage to your car.
In general, a good rule of thumb is to ask your insurance agent whenever you add a new driver to your household (whether they just moved in or just got their license). If that person has a poor driving record, it is better to have them listed as an excluded driver than to not have them listed on your policy at all.
What About a Teen Driver With a Permit?
Again, it really depends on your insurance policy. A learning driver may be covered as a permissive driver under your policy. Other carriers only require licensed teens to be listed. Your insurance agent can tell you whether someone who lives with you is properly covered and, if not, what you'll need to change your policy.
Unrelated Drivers Living in Your Household
One of the trickiest elements is figuring out whether an unrelated driver living in your household—a roommate, for example—needs to be listed on your car insurance policy. It really depends on your insurance carrier. Some carriers want every licensed driver in your home either listed or excluded from the policy. Others extend coverage as long as that driver has his or her own car insurance policy.
It is in your best interest to check with your insurance provider to make certain your policy is set up properly.
If you let an uninsured driver drive your car, and they get into a crash, you could be responsible for paying damages above and beyond what your insurance covers. If an uninsured driver needs to drive your vehicle, ask your insurance agent if you can add them as a driver.
Allowing an uninsured driver to drive your vehicle can be especially troublesome if the driver is a high-risk, has recently committed a major traffic violation such as a DUI, or has a suspended license. Your insurance company may wish you to exclude such a driver from your policy.
The one time you can be certain you don't have coverage is when an excluded driver drives your car. A driver is excluded when the insured person signs documentation stating they understand the driver will be excluded from coverage on a particular car insurance policy. You should know whether any drivers are excluded from your policy. If an excluded driver damages your vehicle, you’re on the hook for the damage, so choose who you let drive your vehicle very carefully.
Each insurance policy is different, and it’s best to speak with your trusted insurance agent to protect yourself legally and financially from the potential consequences of improperly listing the drivers on your car insurance policy.