What Happens If Someone Else Is Driving My Car and Gets in an Accident?

Snapshot

If someone else is driving your car and gets in an accident, your insurance should cover damages, but there are exceptions.

Are You Responsible if Someone Else Crashes Your Car?

The simple fact about car insurance is that it covers your car, not you. In most cases, that means if someone else is driving your car and gets in a car accident that’s their fault, your insurance will cover it.

However, even if the accident is covered, you can end up paying for some of the damage. It all depends on:

  • How extensive your coverage is
  • How expensive the accident was
  • Whether you gave the person permission to drive the car
  • And even what the driver was doing when the accident happened

If your car insurance doesn’t cover all the accident expenses and the person driving your car doesn’t have insurance, it can cost you even more. If neither of you have car insurance, it may be time to get some legal help.

Will Insurance Cover an Accident If Someone Else Is Driving?

Generally speaking, the insurance company of the owner of the at-fault car pays for damages. So, if someone else is driving your car, and is at fault in an accident, your insurance company pays.

In “no fault” insurance states, each car involved is covered by its own insurance, no matter who’s at fault for the car accident. But the same rule applies: It doesn’t matter if a non-owner is driving as long as the car is covered.

How much damage the insurance will cover depends on the type of insurance. That’s where it can get tricky if someone else is driving your car.

Getting and paying for auto insurance is almost always the responsibility of the person to whom the car is registered. Most states require that a car owner get insurance that covers liability – the owner’s responsibility if injuries to others or damage to another car or property result from an accident. Some states just require bodily injury liability insurance. Some also require property damage liability.

The dollar amount of coverage required differs by state, as well as whether both types of liability are required.

Some states also require collision coverage, which pays for damage to your own car if you’re at fault.

If you have liability coverage, and the person driving your car is responsible for the crash, your insurance will cover injuries and damage to the other vehicle up to the limit you’re covered for.

Once you hit the limit, the rest of the cost will come from you if the driver of the other car sues. As an example, say you’re covered for $25,000 in bodily injury liability, but the medical expenses of the person in the other car were determined to be $35,000. You’re responsible for the $10,000 your insurance doesn’t cover.

The good news is that if the person driving your car has auto insurance, their insurance can cover what’s left after yours reaches its limit. But yours is still the primary coverage and must be maxed out before theirs can kick in.

If the person driving your car doesn’t have car insurance, then you are responsible for paying for the whole thing.

If you have collision insurance, that should cover damage to your own car, if the person driving it was at fault, up to the limit you are covered for.

State requirements are usually well below the actual expenses that can result from a car accident. Because of that, you may want to pay a higher premium to avoid paying out of pocket in the event of an at-fault accident. If your state doesn’t require car insurance, or doesn’t require full liability and collision insurance, it’s still worth it to be insured.

Exceptions: When the Insurance Company May Not Pay

Your auto insurance company can refuse coverage if someone else is driving your car and crashes it in some instances, such as:

  • If they are driving your car without your permission, and you can prove it, your insurance company can refuse coverage. Proving that you didn’t give permission can be difficult.
  • If a stranger steals your car and crashes it, you are not responsible for injuries and property damage to others. Your collision insurance, if you have it, will cover damage to your car.
  • You can exclude specific individuals from your insurance. If they cause an accident while driving your car, your insurance can refuse coverage.
  • If someone is driving your car while doing something illegal – driving while impaired, without a license, robbing a bank, or some other illegal activity – your insurance company can refuse coverage. This applies if you’re driving, too.

Your insurance company won’t cover someone else driving your car – or you – if you’re using a personal car for commercial purposes, such as delivering pizza or driving for a ride-share company. Be sure to check with your insurance company on what you need to do to add this type of coverage, and it will likely only cover specific listed people.

Some less-expensive insurance coverage requires the owner to list people who have permission to drive their car. If there’s an accident and someone not listed is driving, the insurance won’t cover it. If you have this kind of insurance, you may want to pay more for standard auto insurance rather than risk financial disaster if someone not listed drives your car.

What Happens If an Uninsured Driver Crashes Your Car?

If someone else driving your car crashes it and they don’t have car insurance, it’s generally not a factor as long as:

  • The damage doesn’t exceed your insurance coverage
  • They were driving with your permission
  • They weren’t doing anything illegal

If your insurance company refuses coverage, or your insurance maxes out but it doesn’t cover all the damages, then it’s a problem. If the person driving your car doesn’t have insurance, you will likely be held personally liable for damages, and you’ll have to find the money to pay.

You can try to get the other driver to come up with the money, but that can be a difficult and expensive prospect. This is an instance when getting legal help may be necessary.

What Happens If Someone Without a License Crashes Your Car?

If someone is driving your car without a license and gets into an accident, and they’re at fault, your insurance company can refuse coverage. In that case, you will likely be liable for the damages.

This not only goes for driving without a license, but also for driving while impaired, texting and driving if it’s illegal in your state, or any other illegal activity.

Will Your Car Insurance Premium Go up after Someone Else Crashes Your Car?

Insurance premiums almost always go up if the insurance company must pay damages for an at-fault accident. This is regardless of whether you or someone else was driving your car.

The Insurance Services Office allows insurers to raise premiums a 20%-40% base after paying out for an accident. But other factors, including where you live, the accident’s circumstances, how expensive the accident was, and more all play in the final decision. Premiums after making a claim for a crash can go up as much as 80%.

The best way to avoid the financial hit that can come from someone else crashing your car is to understand your insurance coverage. Don’t just get the minimum insurance required and to be careful who you give your car keys to.

If your insurance coverage refuses to pay damages when someone else crashes your car, you may want to seek an attorney’s help.

Maureen Milliken

Maureen Milliken has a three-decade career as a journalist at daily newspapers and publications that focus on business and consumer finance. She covered several beats during her newspaper career, including local and state news, features on prominent public officials and several years running a sports department. She is a subject expert on topics that include consumer debt, consumer credit, labor issues, financial abuse, rural development, and legal matters resulting from accidents in the workplace and on the roads. She is adept at presenting complicated topics in an easy-to-read format that helps readers understand the topic's impact on their lives … and their pocketbooks!

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Sources:

  1. Megna, M. (2021, August 9) How Much Does insurance Go Up After an Accident? Retrieved from https://www.carinsurance.com/how-much-does-insurance-go-up-after-accident.aspx
  2. N.A. (2021, March 25) Background on: Compulsory, uninsured motorists. Retrieved from https://www.iii.org/article/background-on-compulsory-auto-uninsured-motorists
  3. N.A. (ND) Auto Insurance Basics: Understanding Your Coverage. Retrieved from https://www.iii.org/article/auto-insurance-basics-understanding-your-coverage