Does car insurance cover the car or the driver? This is a confusing question, and you’re not alone if you can’t come up with the answer right away. It does not have a simple answer. In general, car insurance is designed to cover the car, but it also depends upon the type of coverage to which you are referring. There are different options for car insurance, and you don’t necessarily need to have them all. It just depends upon your priorities, state requirements, and what you want to be protected in the event of an accident. And, in certain situations your private passenger auto policy will cover you in other autos, such as rental cars or for PIP coverage in some states.
Comprehensive: This type of insurance helps to cover the costs of damages to your car that are not the result of a collision with another vehicle or stationary object. These incidents may include fire, inclement weather, and theft. It would also cover other scenarios that were beyond your control, such as an animal in the roadway, falling rocks or debris, and flooding. For example, deer may jump out in front of you while driving causing you to swerve and crash into a tree. Hail is another common insurance claim. It can cause dents or even break your windshield. With comprehensive coverage, your insurer will work with a local auto body or window replacement shop to cover the damage. These “acts of nature”, or those accidents that are beyond your control, are covered under comprehensive insurance, now more commonly called “other than collision”. This form of protection will help to repair or replace your car.
Collision: This type of insurance pays for damage to your vehicle (or total destruction) caused during a collision with another car or stationary object (tree, sign, bridge, etc.) or vehicle overturn. The company usually will pay to fix, or may replace. Collision coverage might step in if your parked car is hit by another driver.
Normally collision and comprehensive coverage will be subject to a deductible.
Liability: If you are involved in an accident and you were at fault (or partially at fault), having liability insurance will help to pay for injuries suffered by the other party and damage to the other person’s personal property should you be liable. These two aspects are called bodily injury liability and property damage liability. It will help to pay for their medical bills and any other damages caused. It would also help cover your legal fees in the event of a lawsuit.
Most states require liability coverage, except New Hampshire. The minimum requirements will vary by state, but will include the total amount of bodily injury coverage per person, the total limit if two or more people are injured in the accident, and the amount of coverage for property damage.
Medical Payments: Getting into a car accident may result in broken bones, concussions, and other sorts of maladies. Fortunately, having medical payments coverage will help you to pay for doctor visits, stays and services in the hospital, and funeral costs. The question of which driver was at fault in the accident doesn’t matter either. You, as the policyholder, as well as your passengers and family members will be covered no matter if you were traveling in your own insured vehicle or anther person’s insured vehicle.
A better question for this article might be, “Will my insurance cover drivers not listed on my policy?” In other words, if you let someone borrow your car for a day, or month, will they be covered by your car insurance?
Anyone that you allow to drive your car is called a permissive driver. If that person gets into an accident, they will be covered under your insurance. As stated by insurance trial lawyer, Gary Wickert, “One could say that if you loan your vehicle, you loan your insurance.” There are always exceptions to this rule, including the state-specific insurance laws, the facts surrounding the accident, and the language of your insurance policy. You need to look at policy exclusions, such as geographic exclusions for use outside the United States.
If the permissive driver gets into an accident, your insurance will cover the car. The driver’s insurance will be used as secondary coverage to help pay for the damages. If the driver was uninsured, then you will probably have to pay the remainder out of pocket. It could also lead to increased premiums because of the dangers involved in letting an uninsured driver take your car.
The other type of driver who may get behind the wheel of your vehicle is called non-permitted drivers. This includes those individuals who steal your car and then get into an accident. Theft is part of your comprehensive coverage, so this policy will help to pay for the damages.
Commercial insurance policies often will exclude coverage for drivers who do not have the explicitly expressed permission to drive from a “named insured.” Also, in some states, and with some insurance companies, coverage will revert to statutory limits if the driver at the time of the accident is a member of the household who has not been disclosed to the insurance company. For example: your policy could have $250,000/$500,000 limits, but could suddenly only provide much less coverage at the time of accident ($30,000/$60,000 in Minnesota).
If you happen to live in a state (like Texas) with a “named driver” policy, you should be aware of the restricted coverage offered.
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