Is car insurance tied to the car or the driver?
Imagine these situations two different situations:
Situation #1:
You decided to lend your car to a friend whose car is in the auto repair shop. Unfortunately while he is out he gets into a small accident. Everyone involved in the accident was okay, but who is financially responsible for the damages? You (since it is your car) or the friend (since he was driving)?
Situation #2:
You rented a car on your most recent vacation to San Diego and get into an accident and you decided to not buy the rental car insurance in order to save some money. Will your car insurance cover the accident? Or should you have opted for the rental car insurance?
The answers:
Situation #1 will pull in your own personal auto insurance; your insurance is tied to the car not the driver. Your friend’s insurance would be pulled in as the secondary coverage for the accident, but there may be a case if the damage is extensive that both affected parties could look to you for financial coverage and damage reimbursement. Unfortunately, if your friend hadn’t asked to borrow your car and still drove it and got in an accident, you may still be responsible for the damage repair and expenses.
Situation #2 is a situation that nearly everyone who rents a car hopes will never happen. Car renters often avoid purchasing the rental insurance due to cost, but in some cases this can lead to a very expensive mistake. The good news is that typically most personal auto insurance will follow the driver so at the end of the day if you are an accident you may not need rental car insurance.
The loophole here is if the rental car is damaged the rental car company may charge you for loss of use while the vehicle is being repaired which may not be covered by your personal insurance policy. If you are renting a car while traveling for work, be sure to check with your coverage with your employer.
Have a great understanding of your coverage
The most important thing is to understand the coverage you have. Whether your auto insurance follows you or your car is a difficult question to answer and isn’t black or white. It’s nearly impossible to memorize all the details of your coverage, have a handle on the main important parts of your coverage and if you need clarification for particular situations where you aren’t sure, ask your agent!
