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  • Writer's pictureSDL Insurance Solutions

Is Car Insurance Tied to the Car or the Driver?

A silver car driving down a curved road with mountains in the background. White text on the left side that reads "Clarifying Auto Insurance Coverage"

So you lend your car to a friend, and he gets into an accident. Who’s financially responsible — you or the friend? What about a situation when you need to rent a car? Should you opt for the rental car insurance or will your existing insurance cover you in the event of an accident? Put another way, is your car insurance tied to you or your car? The answer: It depends.

Who’s responsible if your friend crashes your car?

Let’s tackle the first scenario when your friend crashes your car. Personal auto insurance is attached to the vehicle in this case. If your friend is found liable, you would likely be responsible and your car insurance would then apply.

Your friend’s insurance would be secondary, and his provider would only step in if the damage exceeds your insurance limits. If your friend is uninsured, however, and the damage is extensive and involves other vehicles, the affected parties could look to you for property damage reimbursement and medical expenses. And note that even if your friend didn’t have permission to use your car, this can be difficult to prove.

Do you need rental car insurance?

Now let’s talk about the second scenario: renting a car. In this case, most personal auto insurance policies go with the driver. If you have comprehensive and collision coverage in addition to liability coverage, you may not need rental car insurance.

If you damage a rental car, the rental car company could charge you for loss of use since a vehicle in repair isn’t rentable. This may not be covered by your insurance policy. And if you need to rent a car while traveling for work, be sure to check your coverage with your employer.

Understanding the scope of your current coverage is key before lending out your car or booking a rental. Make sure you’re familiar with your policy and coverage and get in touch if you have any questions.

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