The first question to ask in this case is: Do you live with your friend? (For instance, is your friend also your roommate?) Then, can my friend be on my insurance policy?
If your friend does not live with you, the simple answer then is no. Your insurance company will not let you add your friend to your insurance policy. However, you might consider adding your friend to your policy as an “occasional driver.”
But let’s say that you friend does live with you. In that case, does your friend have a valid driver’s license? If your friend is a licensed driver, it might be wise to discuss up front who would pay for any damages that might occur while your friend is driving your car. Taking a second precautionary step, it might also be wise to get that agreement in writing.
It is interesting to note that most insurance companies require that every family member who lives in your house be listed on your automobile insurance policy.
If your friend is classified as an “occasional driver,” that additional classification could result in an increase in your rates. Who will pay for this potential increase, you or your friend?
Your Friend Has an Accident with Your Car
Let’s assume that your friend has an accident while driving your car, and that accident results in serious bodily injuries to others and property damage. What happens?
If the damage exceeds your insurance liability limits, realize that the courts can attach your personal assets, including the house where you and your friend live, to recover the damages.
You Deny Your Friend Permission to Drive Your Car
Let’s assume that after considering the above factors you decide to not add your friend to your insurance policy. Taking a step further, you decide not to let him drive your car at all. What happens then?
Realize that automobile insurance is designed to follow the car. This means that your policy will cover the car regardless of who is driving it. However (and this is a big however), you must have given that person permission to drive your car.
This person must also be just an occasional driver of your car, not the regular driver of your car.
So let’s say that your friend drives your car without your permission and causes an accident. What happens?
In this case, you are not likely to be held accountable for the damages. Your friend’s insurance (assuming that he carries it) will need to pay for the damages. However (and this is another big however), insurance companies will assume that you have given that friend permission to drive your car. This will be the case unless you can show, for instance, that you denied permission to your friend because he was acting under the influence of drugs.
A good tip: realize that insurance needs and laws surrounding the use of an automobile are complex. Insurance coverage varies wildly from company to company. Laws are vastly different from state to state. Your independent agent is educated as to the law and has a wide range of companies to provide coverage options.
Also; realize there are exceptions to nearly everything stated in this article. For example; under a commercial auto policy it is customary for the permission granted to be “expressed” by the policyholder.
Don’t try to handle your insurance without an agent you trust.
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Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.
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