Whether you're borrowing a friend’s car for a quick errand or using a family member’s vehicle long-term, it’s important to understand how insurance applies. Many drivers assume they’re automatically covered, but coverage can vary depending on the policy, the driver, and the situation. In this article, we’ll explain how insurance works when you drive a borrowed car, who’s typically responsible in an accident, and what steps you can take to make sure you’re protected.
Getting Insurance for a Borrowed Vehicle
When you borrow a family member or friend's vehicle, remember that an auto insurance policy follows the car, not the driver. When someone gives you permission to use their vehicle, they confirm that they understand that their car insurance policy will respond to any accident that you may have while driving their car.
Insurance Coverage for Borrowed Vehicles
When you borrow someone else's vehicle with their permission, the vehicle owner's auto insurance policy is the primary policy that will respond in the event of an accident. If the person borrowing the vehicle has their own car insurance policy or a non-owner car insurance policy, these policies would be secondary to the borrower’s insurance policy. It’s essential to understand the primary and secondary insurance coverage to ensure you have adequate protection when borrowing another person's car. Suppose the owner of the car has a liability limit of 25/50/25. If you are driving their vehicle and get into an accident, the owner's insurance policy will pay no more than $25,000 to any one person that you injure and no more than $50,000 for total injuries incurred in the accident. In addition, the policy will pay no more than $25,000 to repair or replace the other person's vehicle or property that you damaged in the accident. If the injuries or damages from the accident exceed the vehicle owner's policy limits, your own auto insurance policy or non-owner car insurance policy would pay the additional cost up to the limits on your insurance policy.
If you borrow a car without the owner's permission or use it for commercial purposes, the owner’s insurance policy may not cover the injuries and damage that you cause in the accident. In addition, if you are specifically named as an excluded driver on the owner's car insurance policy, their policy will not cover the injuries and damage that you cause while driving their vehicle.
Understanding Non-Owner Car Insurance
Non-owner car insurance is a type of insurance that provides liability coverage for individuals who do not own a vehicle but frequently borrow or rent cars. It is designed to protect the borrower in case of an accident if the primary insurance policy on the vehicle they are driving is exhausted in a claim. Non-owner car insurance is typically less expensive than standard auto insurance because it does not cover a specific vehicle and only provides bodily injury liability and property damage liability coverage.
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Read MoreDoes Non-Owner Car Insurance Cover Rental Cars?
When you rent a vehicle, you must prove that you have an auto insurance policy that provides at least the minimum liability insurance coverage required by the state you are renting the car in as well as comprehensive and collision coverage on at least one of your vehicles. If you rent a vehicle within the United States and you have full coverage on at least one vehicle on your auto insurance policy, your insurance company will typically cover the damages to the rental car and cover any injuries or damage caused to another person or their property in an accident up to your auto insurance policy's limit. Some insurance companies may even extend this coverage if you rent a vehicle in Canada or Mexico. Be sure to confirm how your policy covers rental cars with your insurance agent or insurance company before renting a vehicle.
If you do not have your own car insurance policy, or you have a liability-only insurance policy, the rental car company will require that you purchase the coverage through them when you rent the car. However, rental car companies typically only provide the minimum liability coverage required by the state in which the car is being rented. A minimum liability coverage policy can be quickly exhausted in a serious accident, which is why having a non-owner car insurance policy is a good idea for anyone who is renting a vehicle. If you have a non-owner car insurance policy in place and the limits provided by your rental car company are exhausted in an accident, your non-owner policy will respond for additional injuries and damages you caused in the accident up to the policy limit on your non-owner policy.
Where to buy non-owner car insurance
Non-owner car insurance can be purchased through an independent insurance agent or directly from a car insurance provider. You can also shop around for quotes for a non-owner auto insurance policy online using an online rating tool such as A-MAX Insurance to get quotes from multiple insurance companies.
How much is non-owner car insurance?
Like a regular auto insurance policy, the cost of non-owner car insurance varies depending on the provider, coverage options, and your driving history. On average, non-owner car insurance can cost less than standard auto insurance because these policies do not cover a specific vehicle and are secondary to the primary insurance policy covering the vehicle that you are borrowing or renting.
Tips for Borrowing a Vehicle
Before borrowing another person's vehicle, ask the car owner about their insurance policy and coverage options. Ask about the extent of coverage, including liability coverage and collision coverage, and if their auto insurance policy has any restrictions or limitations regarding the use of the vehicle. If the owner's insurance policy does not include coverage if they lend their car to someone else, the vehicle owner and you as the driver may be uninsured in the event of an accident. This situation could be financially devastating so it is imperative that you understand how the owner's insurance company would respond if you have an accident while driving their car.
What to Do After an Accident in a Borrowed Car
If you’re involved in an accident while driving a borrowed car, follow the usual steps, including exchanging information with the other party and reporting the accident to the police. Notify the car owner and their insurance company as soon as possible. If you have non-owner car insurance, notify your insurance company as well.
Maintaining Continuous Insurance Coverage
If you have sold your car and are borrowing someone else's car or renting a vehicle until you get a new one, consider purchasing a non-owner policy so that you maintain continuous auto insurance coverage. Maintaining continuous insurance coverage is essential to avoid gaps in coverage and potential penalties. When you incur a lapse in auto insurance coverage, the cost of a new insurance policy can be significantly higher than if you maintained coverage between selling one car and buying another. In addition, having a non-owner policy during this time gives you an extra level of protection while borrowing or renting a car in the interim.
Borrowed Vehicle Insurance FAQ
Car insurance follows the car, not the driver. When you borrow someone else's vehicle, their insurance would be the primary policy to respond after an accident that you have with their car. If you have an insurance policy of your own or a non-owner policy, that policy would be secondary to the primary policy on the vehicle and would respond only if the primary policy's coverage was exhausted in a claim.
You should consider purchasing a non-owner car insurance policy if you are in between vehicles or if you are borrowing or renting a vehicle to give you continuous insurance and an extra level of protection when driving a vehicle you do not own.
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