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How auto insurance work if you are lending out your car.

If you frequently lend your car out to friends or family members, then it’s important to understand your liability.  While you might assume that the driver’s insurance will cover the cost of any accidents or damage events, this isn’t usually the case.  In most states, insurance law dictates that coverage follows the vehicle and not the driver.  This means that, if you lend out your car, you are responsible for any accidents the driver gets into.  Curious to learn more about this unique coverage situation?  Then here’s how auto insurance works if you are lending out your car.

  • Lending Out Your Car

Because the car owner is financially responsible for the damages caused by their vehicle, it’s important that you know your coverage limits before you let others drive your car.  In some cases, your auto insurance policy may impose lower coverage limits when your car is being operated by a driver who is not listed on your policy.  In some cases, your insurance will not cover the other driver at all.  For instance, if you regularly lend your car out to someone who is not a member of your household, or if you are lending your car out for business purposes, then your auto policy might deny the driver coverage.

  • Adding a Driver to Your Policy

If you frequently lend your car to someone that you do not live with, then you should add this person onto your auto insurance policy as an additional insured.  You should also take this step if you are lending your car out for an extended period of time.  This way, you can ensure that the driver has the coverage that they need to stay safe.

This is how auto insurance works if you are lending out your car.  Do you have additional questions regarding your car coverage?  If so, then contact the experts at Promised Land Insurance Group for assistance today.

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