Consider several factors before you allow your kids to get behind the wheel of someone else's car — or before someone gets behind the wheel of your car.
With school back in session, more students will be driving to and from school during the morning and afternoon hours. Parents know they can't monitor their kids at all times, but they can work with their kids to set ground rules before young drivers hit the road. One of these rules: What cars your kids can drive. Before you let your child drive someone else's car, or before someone outside the family drives your car, consider these factors.
Whose Insurance Applies?
If your child's friend drives your car and wrecks it, whose insurance covers the damages? The answer varies depending on the state you live in. In most states, insurance coverage follows the car — not the person driving it — in the event of an accident. However, if damages resulting from the accident exceed the amount allowed by your policy, then the driver's insurance may be considered as secondary or supplemental insurance to the insurance on the car.
For instance, let's say your policy has $15,000 in property damage liability coverage. Your daughter lets her friend drive your car to her mom's house 30 miles away. In the process, she causes a three-car collision, which results in $20,000 of damage to the other vehicles and property.
In most states, the insurance you have on your car will cover the damage, but since you only have $15,000 of coverage, the friend's insurance policy may kick in and pay for the remaining $5,000 of damage. However, in some states, you could personally be held responsible for any remaining damages beyond your insurance limits if your child's friend doesn't have car insurance, even though you or your child weren't driving at the time of the accident.
It's also possible that if your insurance company pays for damage in an accident, they may pursue the friend's insurance company to pay back the damage. They won't attempt to recover any money that you pay out of pocket, though. Again, this is both situational and based on your state's laws, so there's no single answer to the question. Your best option is to check with your insurance company to find out how insurance works in your state.
Before your child's friend drives your car, make sure you and your child think about the following:
- Whose insurance will pay for the damage?
- Who will ultimately be responsible for paying any out-of-pocket expenses?
- If your insurance pays, are you willing to take the risk, including possibly paying more for insurance when your policy renews? If not, you may want to rethink letting anyone outside of your family drive your car.
Should You Update Your Policy?
If you know your child's friend drives your car regularly, it may be best to add that person to your auto insurance policy. Similarly, if your child regularly drives a roommate's vehicle, it may be best to add your child to the roommate's policy.
Often, insurance companies may require that you add a driver or car to your policy if the person or car isn't already on it. This helps ensure that proper coverage is afforded in most situations.
If you have questions about whether or not to update your policy, your insurance company should be able to answer them. With a Progressive policy, customer service representatives are happy to answer your questions 24/7 by phone at 1-800-PROGRESSIVE.
The information in this blog may vary based on your particular state or situation. Always refer to your insurance policy for your specific coverages.