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My Friend Crashed My Car: Am I Covered?

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Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency...

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: Mar 13, 2020

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Let’s face it; unless you live alone and have no friends or family living near you, an individual not listed on your insurance policy will probably drive your car at some point.

The thought of an accident is probably the furthest thing from your mind when you hand over the keys. Unfortunately, these quick trips result in accidents thousands of times a year.

If you’re reading this, perhaps the worst-case scenario has already occurred.  The good news is that you’re probably covered, assuming you’ve got car insurance.

[You might not be covered if you have a Broad Form policy.]

Most People Who Drive Your Car Are Covered

Of course, as with any type of accident, claim payment will depend on the type of coverage you chose when you purchased your auto insurance policy, as well as a few other factors.

First things first, almost anyone who drives your car is covered under your insurance policy.

An individual does not need to be listed on your policy to be covered. A good way to remember this fact is to understand that insurance coverage “follows the vehicle.”

Basically, this means that any vehicle that is listed on any insurance policy is “covered” by the policy, regardless of who is driving at the time of the accident.

As alluded to above, this may not be the case if you purchased a Broad Form policy, so be sure you know the distinction.

What If My Friend Has Their Own Insurance?

The coverage on any particular vehicle that causes an accident is considered “primary” coverage.

This means the insurer and coverage limits associated with that policy are the first to respond to any claims for bodily injury and/or property damage resulting from the accident.

Any insurance your friend has is considered secondary, meaning if your policy liability limits are exhausted as a result of the accident, their policy would likely cover the excess damages.

It’s worth pointing out that the primary insurance holder should expect their insurance premium to go up as a result, assuming they’re the at-fault party.

So make sure you’re careful about letting others drive your car!

[Will my rates go up if I file a claim?]

When Am I Not Covered If My Friend Crashes My Car?

There are a few exceptions to the rule about insurance following the vehicle. The individual driving your car must not have been specifically excluded for coverage under your policy.

Excluded drivers can range from household members above 15 years of age who aren’t licensed yet, to a parent who has a driving record that results in an outrageous premium. So not necessarily just a friend.

But if your friend lives with you and/or has regular access to your vehicle and isn’t listed on your policy or specifically excluded, you’ve got a problem if he/she causes an accident while driving your car.

Whatever the reason for the exclusion, you’re basically telling the insurance company you do not want the individual covered because you don’t want to pay additional money to insure them on your policy.

Another caveat regarding coverage for individuals not listed on a policy states that a driver must NOT have regular use of the vehicle.

This is a policy condition that protects the insurer from writing policies and potentially paying insurance claims for drivers that are intentionally not named as a means to keep premiums down.

For example, if you have a roommate with three DUI’s who regularly drives your car, he or she needs to be listed on the policy and a (higher) premium must be paid.

Or they must be excluded if you don’t want to pay the extra premium for listing him or her as a driver.

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