In most cases, drivers are not insured - vehicles are. With certain restrictions, it doesn't matter who is behind the wheel in the event of an accident. The policy covering the vehicle typically pays resulting claims. There are a few exceptions, however, depending on state law.
Coverage Usually Depends on Permission
Coverage usually involves the driver having the owner's permission to operate the vehicle. If your elderly neighbor gives your teenager the keys to his car to run an errand for him, the neighbor's policy on the vehicle should pay for any damages sustained in an accident. However, if your teenager "borrows" the car without permission, the insurance company may deny the claim because he's taken the vehicle without the owner's knowledge. Sometimes coverage comes down to the exact provisions of an individual policy.
State Laws May Differ
Coverage when you're driving someone else's vehicle might depend on where you live. For example, in Florida, the property damage liability provisions of your own policy would cover claims, even if you're driving someone else's car. In Ohio, you can't drive at all - either your vehicle or someone else's - unless an auto insurance policy covers the car or you have some other proof that you can pay for any damage you cause.
Negligence May Be a Factor
The situation can change if you lend your car to someone you know should not be driving. For example, the individual may be intoxicated or under the influence of drugs, unlicensed, or too inexperienced or too old to safely operate a motor vehicle. In this case, you may be held personally liable if an accident occurs. If your insurance policy covers other drivers who operate your vehicle with your permission, this might not be much of a distinction. However, in states where the driver's insurance is responsible for an accident, and particularly if a fatality occurs, his insurer can look to you for reimbursement because the law considers you at fault. You could be at risk for a wrongful death suit.
Comparative Negligence May Affect Claims
When accidents involve two vehicles and two drivers, comparative negligence can also affect claims. Most state codes allow insurers to assign blame for an accident in percentages and apportion payments accordingly. For example, in New Jersey, if you let someone borrow your car and that individual is more than 50 percent at fault for an accident, you have no claim against the other driver's insurer. If the driver of your vehicle is determined to be 50 percent at fault by the company's investigators, and if the accident totals your $26,000 vehicle, the other driver's company is only responsible for $13,000. Your company is responsible for the other $13,000 - but only if it covers you regardless of who is driving.
An Insurance Lawyer Can Help
The law surrounding automobile insurance is complicated. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact an insurance lawyer.