What Happens If Someone Wrecks Your Car And They Aren’t On Your Insurance?

Understand Your Auto Insurance Policy

So if someone crashes your car, who pays? Letting a family member or friend borrow your vehicle may seem like a small gesture, but it could have big consequences if that person hits another car or object. With most insurers in most states, your liability insurance can cover the accident of someone you permitted to drive your vehicle.

However, you must read the fine print of your policy to understand the terms of coverage for lending out your car. In most cases, your insurer can cover the damages if the person driving your vehicle has your permission and is at fault. This is known as permissive use.

Typical Drivers Recognized by Your Insurance

Coverage may vary by state and insurer, but your liability policy typically can pay for damages and injuries someone driving your car causes to others up to your policy’s limit. Insurers usually recognize three types of drivers sitting behind the wheel of your vehicle:

• Named insured
• Household members
• Permissive users

Perhaps you live with someone who’s not related to you, or you have a friend who frequently drives your vehicle. In either case, most insurance companies will require you to name this person on your policy.

The person you share a home with can access your car, and you may have a tacit understanding that the vehicle can be shared. In those instances, insurers want to understand their risks and know who may drive your car. That’s a named insured covered by your policy.

Your insurance policy may not name household members, such as your spouse or other relatives, who are licensed to drive, but the insurer can view them as covered by your policy if they drive your car. Someone else you allow to drive your vehicle is considered to be a permissive user.

Who Is a Permissive User?

A permissive user is anyone you permit to drive your car who is not specifically named in your auto insurance policy or a related household member. In other words, they’re a car accident driver not on your insurance policy. Permissive use is not allowed by every insurance policy, and those that do permit it may offer limited coverage.

If you allow friends to drive your car, whether with or without you, you should check to see if your auto insurance policy allows permissive use and, if so, to what extent. Your policy might:

• Not cover permissive use at all
• Provide limited coverage
• Require you to increase your deductible if you make a claim

A permissive user’s insurer could cover damages resulting from someone crashing your car. However, it is best to understand your policy and the coverage and limits of your permissive user policy.

When Coverage Might Be Denied

It might seem harsh to tell people you won’t allow them to borrow your car. But there are instances to consider taking this stance. Your insurance carrier could deny coverage if someone driving your vehicle has an accident while making a delivery in a side hustle or transporting equipment for the person’s work.

What happens if your friend gets in an accident in your car? You may not drive your vehicle for work. But your friend could be self-employed or want to borrow your car to provide rideshare services. If your policy doesn’t allow business uses under its permissive use clause, the insurer can deny coverage if there’s an accident.

Your insurer also might deny coverage if you lend your vehicle to someone unlicensed or inexperienced.

You also must consider keeping the uninsured from driving your car. If an uninsured driver has access to your car, list the person as an excluded driver with your insurer to avoid reporting to your insurer that “an uninsured driver crashed my car.”

What About the Non-Permissive Use of a Vehicle?

So what happens if someone takes your car without your permission and crashes it? Typically, their auto insurance can cover any damages. But if the person doesn’t have insurance, you may need to file a claim with your insurer, which could include proving that the person didn’t have your permission to drive your car.

Does Your Auto Insurance Cover You or Your Car?

In general, your liability insurance policy pays for damages and injuries to others when someone else is driving your car. This is because your auto insurance covers your vehicle first and you second. However, whether your insurer ends up providing coverage can depend on who was at fault: the driver of your car or the other driver.

If you’re in an accident in someone else’s car, the insurance company of the person who let you borrow the vehicle pays for damages and injuries if you’re at fault. You can receive a car accident settlement from the other driver’s insurer if that driver is at fault.

Discuss Your Auto Insurance Needs With a Professional

It can be worth your time to read your auto insurance policy and understand what happens if someone wrecks your car and they aren’t on your insurance. At ConsumerShield, insurance professionals can take the time to guide you through the details of your auto insurance policy. Get in touch with us today.