Does auto coverage follow the car or the driver?
If you often lend your car to friends or family members, then you might assume that their insurance will protect them in the event of an accident. However, this isn’t usually the case. Most states, including the state of Arizona, have laws that stipulate that auto insurance follows the car and not the driver. This means that you will be responsible for any injuries or damage that your car causes, regardless of who is driving. Here’s what you need to consider about your insurance before you lend out your car.
Because the car owner is financially responsible for the damages caused by their vehicle, it’s important that you know your coverage limits before you lend out your car. In some cases, your auto insurance policy may impose lower coverage limits when your car is being operated by a driver not listed on your policy. Additionally, there are some instances in which your insurance will not cover another driver at all. For example, if you regularly lend your car out to someone who is not a member of your household or if you lend your car out for business purposes, then your auto policy might deny the driver coverage.
If you frequently lend your car to someone that you do not live with, then you should add this person onto your auto insurance policy as an additional insured. You should also take this step if you are lending your car out for an extended period of time. This way, you can ensure that the driver has the coverage that they need.
This is how insurance works on a borrowed car. Do you have more questions about your car coverage? If so, then contact the team at Phocus Insurance in Phoenix, Arizona. We are eager to assist you with all your auto insurance needs today.
