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“Hey, can I borrow your car to head to the grocery store real quick?” If you’ve borrowed someone else’s car or let someone use yours to run an errand, you may have wondered how car insurance works in these situations. Will your auto insurance cover damages if someone borrows your car and gets into an accident?

Typically, auto insurance follows the car and not the driver, so you’ll be covered up to your policy’s limits if you give someone permission to use your vehicle and they get into an accident. However, there are times when the answer isn’t so simple. So, let’s go over some factors that could affect coverage.

Will My Auto Insurance Cover Someone That Borrows My Car?

Since car insurance typically follows the vehicle, you’ll likely have coverage options if someone borrows your car and gets into an accident. In these situations, most states consider the auto insurance policy covering the vehicle as the primary insurance. This means the car owner’s insurance will pay for damages caused even if the person borrowing the car carries their own insurance. However, for your insurer to cover the accident, the borrower must have your permission, not drive your vehicle regularly, and not be excluded from your policy.

If the above criteria is met, your provider will likely cover damages if someone crashes your car. But, depending on your insurance and the details of the accident, the borrower’s insurance may act as a backup if further coverage is needed.

Permissive Vs. Non-Permissive Use

One of the main factors that will determine if your car insurance covers someone that borrows your car is permission. Permissive use is when you give another driver permission to use your vehicle temporarily. Although most standard policies will cover permissive use accidents, some insurers may not or may limit coverage in these scenarios. Always speak with your insurance agent to confirm what your policy allows.

What if someone takes your car without your permission and gets into an accident? This is called non-permissive use and possibly theft, which means your auto insurance will likely cover no damages if you don’t carry collision and comprehensive insurance.

Excluded Drivers

If you live with multiple adult drivers, your insurance will require you to list them on your policy. However, some states allow you to exclude drivers from your household who will not, or won’t be allowed to, use your car. For example, you may choose to exclude someone in your household with an unfavorable driving record to avoid higher rates. If an excluded driver crashes your vehicle, your insurance will likely deny any claims.

The following states do not allow you to exclude drivers: Hawaii, Kansas, Minnesota, New York, Rhode Island, Vermont, Virginia, and Wisconsin.

Frequency 

The frequency in which an individual borrows your car can also affect coverage if someone else gets into an accident operating your vehicle. Most insurers will provide coverage under permissive use if the borrower uses your vehicle once or highly infrequently. But if the borrower uses your car often and lives in the same household, your claim could be denied as that driver should’ve already been listed on your policy.

For example, let’s say a babysitter uses your car once a week to pick up your children from school. Although the individual does not live with you, your insurer may require you to add them to your policy due to the frequency with which they use your vehicle.

Listing Others on Your Policy

To protect yourself financially, you should add any regular drivers of your vehicle to your insurance policy. That way, if a listed driver borrows your vehicle and gets into an accident, you’ll be covered. Some states or providers may require you to list any driving-age people that live with you. This includes roommates, spouses, and family members. You can also add individuals that do not live with you but drive your vehicle regularly to your insurance policy.

So, Will My Car Insurance Work If Someone Borrows My Car?

In most cases, your car insurance will work if someone borrows your car. However, it’s important to do so with caution, as there are situations where your insurer can deny your claims.

The easiest way to avoid any issues is by speaking with an insurance specialist to understand your coverage. Does someone borrow your car on a regular basis? Do family members have access to your vehicles? In such situations, speaking with an agent can help clear any questions you may have. To speak with an AIS insurance specialist today, call (888) 772-4247, or visit our blog for more insights.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.

Starting a limousine or black car business can be exciting and lucrative. However, it also comes with its own set of risks. As the owner of a livery service, you must protect your vehicles, drivers, passengers, and business itself with the right insurance coverage. With the proper insurance, your company could avoid the risk of financial ruin in the event of an accident or other unforeseen circumstances. Let’s explore the different insurance types available for your limousine or black car business.

Livery Vehicles We Insure

Transportation has evolved dramatically over the years. In 2021, the transportation industry grew by 9.9% and is expected to expand to cater to the growing demand of corporate travelers, tourists, and private households. However, spending more time on the road comes with the chance/ of more car accidents. Therefore any businesses that generate revenue from transporting people will need commercial auto insurance to protect themselves and their vehicle(s). The most common types of livery vehicles we insure are:

What Does Commercial Auto Insurance Cover?

The coverage provided by livery commercial auto insurance is similar to what you would find from a personal car insurance policy. Where it can differ is the coverage limits and a focus on protecting clients in the car, not just drivers. A livery commercial auto policy offers the following coverage:

• Bodily Injury: This type of liability insurance provides payment in cases of bodily injury or death resulting from an accident for which you or your driver are at fault. This may also include legal defense expenses should you be sued by the other driver.

• Property Damage: If your vehicle accidentally damages another person’s vehicle or property, this coverage helps pay for their repairs.

• Medical Payments: This coverage provides payment for any medical expenses that may arise due to an employee or a passenger traveling in your vehicle, regardless of who is at fault in an accident.

• Uninsured/Underinsured Motorist Coverage: Despite insurance being required in nearly every state, many still choose to drive without it or need more coverage. Uninsured motorist coverage provides payment for any medical expenses caused by a hit-and-run driver or an uninsured driver. Underinsured motorist coverage, when the at-fault driver has insufficient insurance to cover the damage caused, may be included depending on the type of policy.

• Comprehensive Coverage: Comprehensive insurance covers damage to your vehicle after a non-collision-related incident. The most common examples are theft, vandalism, and fire, and they may even cover damages to your vehicle that are done by your passenger(s).

• Collision Coverage: Collision insurance helps pay for damage to your vehicle caused by a collision with another vehicle or property.

How Are Commercial and Personal Auto Policies Different?

Both commercial and personal auto insurance covers liability, collision, comprehensive, medical payments, and uninsured/underinsured motorist exposures. However, a commercial auto insurance policy provides additional coverage that a standard personal auto policy cannot. For example, other drivers and vehicles not owned by your business may be covered in work-related incidents. Additionally, if you’re using your vehicle to transport people and are in an accident, your regular car insurance will most likely deny your claim.

Other Insurance Policies Livery Businesses Should Consider

As a livery business owner, it’s important to consider additional insurance policies beyond the standard commercial auto or fleet insurance. Here are a few to think about:

Business Owners Policy (BOP): Combines general liability insurance, commercial property insurance, and business income interruption insurance.

Professional Liability Insurance: Also referred to as errors and omissions, protects your business from the cost of faulty workmanship or breach of contract claims.

Workers’ Compensation: If you hire drivers, you will be required in almost all states to obtain workers comp. This insurance provides wage protection and coverage for medical expenses if you or your employees are hurt on the job.

Employment Practices Liability Insurance: This insurance policy cover legal defense costs and settlements if owners, managers, etc., are accused and found not legally guilty of discrimination, sexual harassment, wrongful termination, etc.

Speak With a Commercial Insurance Specialist at AIS

You’ve worked hard to build your business – protect it with the right Business Insurance coverage. At AIS Insurance, we can help you find the lowest rates and best coverage for your needs. Speak with one of our Commercial Insurance Specialists today at (855) 919-4247 for a quick and easy free quote.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may differ from those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.