Most of us have lent our cars to friends and/or family members at one time or another. Whether they needed to go to the store, were visiting from out of town, or had their own car in the shop, our mobile castle was theirs for the borrowing. But did you give any thought to whether or not they were insured – their own policy or yours?
Most auto policies allow for permissive drivers, that is, drivers operating your vehicle with your permission. Often, their own auto policies will follow them while driving another vehicle. However, your coverage would be considered primary. Their insurance may cover some medical expenses and possibly supplement if your limits are maxed out.
What you need to watch out for are people driving your vehicle who should be on your policy. For example, your sister is visiting for a week or so from out of town. She will likely be covered. However, if that same sister is moving here and staying at your place until she finds a job, which is a different story, especially if she is using your vehicle to go on job interviews. If your assistant uses your car to run errands for you, he/she needs to be on your policy.
If you have teenage drivers living in your home, you are sometimes forced to add them to your policy. Otherwise, they will be specifically excluded from driving any of your vehicles.
Just something to keep in mind: California Vehicle Code Section 1715 states: “Every owner of a motor vehicle is liable and responsible for death or injury to person or property resulting from a negligent or wrongful act or omission in the operation of the motor vehicle, in the business of the owner or otherwise, by any person using or operating the same with the permission, express or implied, of the owner.”
Before you turn over the keys to your car, check with your insurance professional to see if your auto policy covers permissive drivers. More importantly, how much it will cover someone borrowing your car.