You’ve probably seen that commercial where you’re told to call a particular insurer to find out.  Well, why don’t we just tell you without making you sign on the dotted line.

There are four basic categories of covered individuals when it comes to auto insurance.

First, are the named insured and all family members.  Named insured always includes the spouse of the named insured as long as they live in the same residence.  Family members include children (even when temporarily not living at home), blood and marriage relatives, and adopted or foster children, as long as they live in the residence with the named insured (unless listed and specifically excluded on the policy).

Example: Jenny and Ray are married, have an adopted 17 year old son, a 20 year old daughter in college, and share a home with Jenny’s father.  Assuming Jenny is the named insured on her personal auto policy, everyone in this example is an “insured,” meaning everyone can drive Jenny’s car and will be covered if they are found liable for bodily injury or property damage as a result of an accident.

Second, any person driving your vehicle, as long as the vehicle is listed on your personal auto policy, is covered.  It is important to note that the person driving your car must have permission to drive the vehicle or reasonably believe they had permission to use it.

Example: Rasheed regularly allows his college roommate, Tim, to drive his car to class on certain days of the week.  If Rasheed is away from school for three weeks, and does not expressly give permission for Tim to drive his car while gone, Tim can still reasonably assume he is able to drive the car.  In this instance, Tim would be an “insured” under Rasheed’s policy.

The third category is where it gets a little tricky.  The good news is the remaining categories are much less common than the first two.  The third category involves any person or organization being covered as an insured, but only when their liability results from an insured person’s use of their own vehicle for that person or organization.  Let me guess…you’d like an example.

Example: Peter’s boss asks him to drive his own car to drop off some paperwork for his company.  While doing so, Peter causes an accident which injures the driver of another vehicle.  Of course, Peter is covered for liability under his personal auto policy.  His own policy also offers liability coverage to Peter’s boss.  The injured driver from the other vehicle could reasonably sue Peter’s boss, as Peter is technically driving in the course of employment at the request of his boss.  If Peter were driving a company car however, the company’s insurance would be responsible for the damages incurred as a result of the accident.

The final category might just be the most difficult to understand, as it is similar to the third, but has a few different nuances.  Category four basically covers a person or organization for their liability resulting from a named insured or family member’s use of any car or trailer with the exception of an auto that is owned or hired for use by that person or organization.  Let’s take a deep breath and look at an example.

Example: I find this is best explained by putting yourself in the example.  You borrow a car from your friend to run errands for the company you work for.  Note the difference between category three and four is that you are not in your car, rather a car you borrowed.  Also note this is not a company car you are using.

If while running the errands you cause an accident and injure someone, both you and your company would qualify as insured under your personal auto policy.  This is because the car was not hired for business or owned by the company you work for (which would mean it was insured by that company).  It is also important to note your insurance is secondary to your friend’s personal auto insurance, as you are considered an insured on your friend’s policy – based on category number two covered above.  By secondary, I mean your insurer would only pay for the damages above what your friend’s limits are (after all, it is his car).

Let’s just make it clear; every policy is different, and there are many exclusions and additions possible when it comes to who has liability coverage while driving any insured auto.  The above is an overview of the most common policies.  Call your independent agent or direct insurer for the details of your policy if you are ever unsure.  With insurance, it’s always better to be safe rather than sorry.