Home Page > Learning Center > Car Insurance

Insurance Follows the Car, Not the Driver

Most people don't fully understand their car insurance and exactly the way it works. Car insurance is tied to the vehicle not the owner. Even though the rate is partly based on the usual and customary driver of the vehicle, the coverage follows the car.

For example, if you loan your car to a friend (anyone with permission), and they get into and accident, your insurance will pay the claim, not theirs. This is very important to remember for one main reason: the premium. Insurance companies raise your rates after an at fault accident. If your friend who borrowed your car is at fault in the accident mentioned above, your insurance will go up and could be in jeopardy of being canceled. You're stuck with the increase in premium as well as any deductible applicable to your policy.

If someone uses your car without permission it's a different story; then you would not be liable for the damage. For example if your car was stolen and involved in an accident, you would not be liable.

Be very careful of who you lend your car to as there can be serious circumstances that arise. If the person borrowing your car does not have his or her own insurance, be more careful. If he/she is involved in an accident and the claim exceeds your coverage, since he/she does not have a policy to go after, the injured party could come after you and your assets.

Don't lend out your car or be extremely careful when doing so. You could be exposing yourself unnecessarily.

Begin a Car Insurance Quote