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Who can drive my car and who can’t?

It was 1965 when the Beatles released the hit “Drive My Car” on their hit album Rubber Soul.  No thought was given to the legality of coverage when the invitation was extended to “drive my car” except that it rhymed with “gonna be a star.”

“Baby, you can drive my car
Yes, I'm gonna be a star
Baby, you can drive my car
And maybe I'll love you.”

The best way to ensure you’re still in love with Baby when you loan them your car is to make sure Baby has both a valid driver’s license and an active insurance policy. Provided a license and active policy are in place if Baby were to cause an accident while driving, your insurance as a car owner is first in line to cover the accident. Under this scenario, coverage would include paying for vehicle damage, providing a rental car to the owner, and taking care of any resulting medical bills.

Down the road, the vehicle owner’s insurance company has the option to work with the driver’s insurance company to collect. This process is called “subrogation” and can result in the driver’s insurance company repaying the vehicle owner’s insurance company for funds paid as a result of the accident. While possible, subrogation doesn’t occur in every situation.

Sometimes Baby keeps the insurance talk out of the conversation. If a driver borrowing your car doesn’t have insurance coverage for their own car, a claim can be ratable which will likely result in increases to your own insurance policy.

Paying for your friends’ mistakes

You own a vehicle and your friend wants to borrow it for the weekend. But your friend does not have any insurance coverage and gets in a car wreck. Your auto insurance pays on the claim. And you see a notable increase in insurance rates on your next policy renewal. If your friend had insurance, their insurance company would pay your insurance company back the money paid out on the claim. In that case, your friend would be found at fault which in turn would impact their rates, and not yours.

While it is not a legal requirement for a driver to have insurance coverage in order to drive your car, it could save you money. Ask the simple question “Do you have insurance?” before you hand a friend your car keys.  

In Need of Car Insurance? Call your advisor today for a personalized quote.