Does Auto Insurance Follow You or Your Vehicle?

The answer to that question is Yes…and also No

Most aspects of your coverage are fairly straightforward. You’ve hopefully done your research before building your policy, ensuring that you opt for the types of insurance – collision, comprehensive, additional liability, personal injury protection, uninsured/underinsured motorist and medical payments—that will provide ample protection for your needs and lifestyle. Your coverage will pay out up to your policy limits. Ideally, you touch base with your insurance agent every year or so to ensure that your policy is still a good fit.

Unfortunately, the question of whether your policy covers you or your vehicle doesn’t have a straightforward answer. Generally speaking, the insurance follows the automobile, meaning that if you drive and wreck your friend’s car, they will file with their own insurance rather than yours. However, if you’re driving and wreck a rental car, your insurance will cover damages. There are numerous variables that influence whether your insurance covers you or your vehicle, such as what type of auto insurance you’re referring to.

Here’s an outline of which types of auto insurance follow your car and which types follow you.

Insurance that Follows Your Car

These types of insurance cover your car, no matter who was driving it at the time of the accident.

♦ Liability Insurance

If you loan your car to a friend and he is the at-fault driver in a collision, your liability insurance will cover the injuries and damages incurred by the other driver. If your liability limit is met, then the injured driver may attempt to pursue further compensation from your friend’s insurance company if his liability limit is higher than yours. However, unless he carries additional coverage for damage to non-owned vehicles, it’s unlikely that his insurance would pay anything out since your car is not on his policy.

♦ Collision Insurance

In keeping with this scenario of your reckless friend, your collision coverage would also be used to cover any damages that resulted from that collision. Even if he has insurance, his own premiums are based on the costs that could arise from repairing or replacing his vehicle, not yours.

♦ Comprehensive Insurance

If this same unfortunate friend hit a deer while driving your car, it would be your comprehensive coverage – not his – that would cover the cost of repairs.