Car Insurance: What If Someone Else Is Driving My Car?

In the State of North Carolina, all vehicles being operated on public roads are required to be covered by at least a minimum of liability insurance. If you're involved in a car accident, either your car insurance company or the other driver's insurance should pay for damages. But what if someone else is driving your vehicle? Whose insurance pays then? As with many insurance questions, the answer to this one is, “It depends.”

Who's At Fault?

If someone else is driving your car and is involved in an accident, the liability for any damages falls to the driver deemed responsible for causing the accident. If the other driver is liable, their car insurance company will usually be responsible for paying damage costs.

If the person driving your vehicle is held liable, your car insurance company will usually be responsible for paying damage costs, with some possible exceptions. In most instances, your vehicle insurance applies to your car more than it applies to you as a driver. If your car insurance limits are not sufficient to pay for all the damages and the person who was driving your car has their own car insurance, their policy may contribute secondary payments after your policy limits are reached.

The Exceptions

There are three situations in which your car insurance may decline paying for damages caused by someone else who was driving your car:

1. The person driving your car and held liable for causing the accident is found to have been doing something illegal at the time. This could include driving without a valid operator's license or driving under the influence of drugs or alcohol.
2. The person who was driving your car was specifically excluded on your policy. You may have excluded someone from your policy because of their poor driving record that you knew would cause an increase in your policy premiums.
3. If someone is driving your car without permission and has an accident, your insurance company may refuse to pay a claim.

Other Considerations

When you lend your car to another driver, you are taking responsibility for their driving and if they cause an accident your insurance rates may go up because your insurer now sees you as a higher risk policyholder.

Your policy's deductible will need to be paid when making a claim. As the policy owner, you'll have to decide between you and the at-fault driver who will pay this.