Auto Insurance Coverage for the Driver Versus the Car

The short answer is, the vehicle has the coverage, not the driver, but it’s not always that simple.  When you purchase an auto insurance policy, the company also takes into account who will be driving that car when they give you a rate, and that also affects coverage should an accident occur.  If, for example, you take out a policy on your new Ford Fusion, and you allow your teenaged son, who has been driving for three years and who resides in your household, to drive your car even though he is not listed as an insured driver, some insurers will not allow coverage if he has an accident.  Why?  Your insurer asks you when you apply for a policy who will be driving your car.  You list all the drivers and tell the company how much they will be driving.  Many will hold you to that.  You should have added your son as an insured drive when he started borrowing your car.  (Yes, your rate would have gone up if you did that.  Teenaged drivers are risky drivers.)

Insurers realize, however, that you cannot always foresee who will be driving your car in the future, especially if they don’t live with you, so, interestingly, there is a category of driver called “permissive drivers”.  These are friends, neighbors, relatives, all of who do not reside in your household, but whom you have given permission to drive your car infrequently.  Should they have an accident, even if they have no coverage of their own, they are covered under your auto policy.

So, back to your question.  If you lend your car to a friend, he has your permission to drive it, making him a permissive driver.  Your insurance will cover him if he has an accident whether he has his own policy on his own vehicle or not.