Although your car insurance will often cover drivers who are not listed on the policy if they had permission to borrow your vehicle, there are some important exceptions to this rule of which you should be aware. If you lend your car to someone who is not covered, both you and the borrower of the car can be held personally liable for all damages caused by the borrower.
Coverage for Other Members of the Household
Many policies require members of the household who are over driving age to be listed by name, while others offer more general coverage to all household members. However, household members are typically defined as people who live in the house and are related through marriage, blood, or adoption. If you are living with a roommate or partner, and you let them use your car, to assure they are covered by your insurance policy, you will need make sure they are listed by name on the policy. If you do not, you may place yourself at risk that your vehicle is not insured while a roommate or partner are driving your vehicle.
Coverage Under the Concept of Permissive Use
When you allow someone who is not a member of your household, or who does not live with you, to borrow your vehicle, the concept of permissive use may provide coverage in the event of an accident. This coverage is not necessarily the same level as you would have for yourself when you are driving. Many insurers apply a higher deductible or lower coverage payment limits to permissive user accidents. You need to read your policy carefully to make sure you have the right coverage for permissive user accidents.
Permissive use does not apply to people who drive your car on a regular basis or someone who will be borrowing your vehicle for an extended period of time. This type of coverage is intended for short, infrequent trips only. For example, a relative comes to visit and you are going to let your relative use your car for the month long visit. You should have his or her name included on the insurance policy. However, if that same relative is only staying for a week or a few days and is going to use the car for running an errand or two while staying with you, there is no need to include them on the policy, they would most likely be covered. You should check with your insurance agent or your policy to make sure coverage is provided.
Business use on a non-commercial policy is generally not covered under permissive use. This is true even if you are just letting a friend borrow your vehicle for a day to attend client meetings or make deliveries. Any type of commercial activity requires specific business insurance coverage.
All drivers who qualify for permissive use coverage must have a valid driver's license. Allowing someone with no license, a suspended license, or a revoked license to drive your car will invalidate your coverage. Check that the borrower has a current license before letting him or her use your car.
Keep in mind that some insurance policies exclude permissive use altogether. Exclusion against permissive use are often found in low cost insurance policies. If you have any doubts about your coverage, you should contact your insurance agent for details.
Excluded drivers are people who are prohibited by name from driving a vehicle. This is most often because they have a record of unsafe driving behavior, such as a DUI conviction, reckless driving charge, they are a high risk driver, or have caused multiple accidents in a short timeframe.
Not all policies allow excluded drivers, but some will let you exclude a driver to save money or prevent the policy from being canceled entirely. If you exclude a driver by name, permissive use no longer applies. If you allow the excluded driver to drive your car, or you negligently allow the driver access to your vehicle, you will have no insurance coverage in the event of an accident. In this case, you and the driver will be held personally liable for damages.
Liability for Accident-Related Damages
When a car is driven by someone other than the registered owner, the owner's policy is the first source of coverage. If the owner's policy does not apply, the driver's auto insurance may afford coverage. However, not all policies will pay for damage caused to borrowed vehicles.
If no insurance coverage is available, the owner can be held personally liable for the damages, unless someone else is at least partially responsible for the accident. In this case, a personal injury claim would be reduced by another driver's percentage of fault. Claims can include compensation for medical care, lost wages or loss of future earning capacity, and pain and suffering. Under some circumstances the financial liability of an owner of a vehicle used with permission can be limited by law. California Vehicle Code §17151.
An injured person has two years to file a personal injury claim for damages related to an auto accident. Contacting an attorney is strongly recommended, due to the complex liability issues involved in an accident where someone other than the policyholder was driving.
The dedicated legal team at Inland Empire Law Group has extensive experience assisting California residents in receiving the personal injury compensation they need to move forward with their lives following a car collision. Call us today to schedule a free, no-obligation consultation at either our Rancho Cucamonga and Victorville offices. (909) 481-0100 or (760) 243-9100. Call now to preserve and enforce your rights.