If someone borrows your car and is involved in an accident, will your full coverage auto insurance pay for the damages? Who is responsible if your car is damaged while being driven by a valet? Learn more about car insurance for a borrowed car with the following tips.

Auto insurance coverage for friends and family

As a general rule, auto insurance coverage follows the vehicle, not the person. So if you allow a friend or family member to borrow your car and the person is involved in an accident, your policy is the primary insurance coverage depending on the type of coverage you carry. If the damage exceeds your policy’s limits, then the driver’s insurance will cover the rest.

However, where you live, how often the car is driven, and the purpose the car is being used for can also play a role in determining coverage.

  • State of residence – Some states require the borrower’s insurance to cover accidents. Check your policy details or with your insurance agent for your state’s regulations.
  • Length of time the car is borrowed – If you’re loaning your car to someone for longer than one or two weeks, or on a regular basis like a babysitter or a caregiver, they may not be covered under your policy. In these cases you may want to add the person to your policy as a regular driver.
  • Purpose – If your friend or family member is using your car for business purposes, like delivering goods to customers, you’ll need a commercial auto policy to cover your vehicle.

Insurance considerations for other situations

If your car is stolen, your auto insurance coverage is not responsible for any damage caused by a car thief. Also, if an accident occurs while your car is in the care of a valet, the valet company is liable for damages.

Remember, car insurance for borrowed cars generally stays with the vehicle. If you’re not sure which type of policy covers your vehicle when loaning it to a friend, contact your insurance agent for help. And don’t forget to shop around for an auto insurance quote that gives you the coverage you need for your unique situation.

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