The Importance of Insurance

The Importance of Insurance

Does Your Auto Insurance Cover Other Drivers?

Katrina Terry

Suppose your friend asked you to borrow your car for the day and ended up wrecking it. Would your auto insurance policy cover this accident? To answer this question, it is important to understand how auto insurance works, and it is also important to understand that the coverage for the accident will highly depend on several different factors relating to the accident and your auto insurance coverage.

Best-case scenario

The best-case scenario with this would be that your friend was not labeled "at-fault" for the accident he or she was in. Maybe someone pulled out in front of your friend, and he or she could not avoid colliding with the car. Or, maybe someone rear-ended your friend, leaving him or her unable to do anything to avoid this accident. If your friend was not responsible for the accident, your auto insurance does not really matter. It would not be your insurance company's responsible to pay the damages. It would be the person's insurance company that caused the accident who is responsible to pay for it. That is assuming the driver who caused the accident had insurance.

If the other driver was uninsured

If the person who caused the accident was uninsured, then the only way you may be able to receive compensation for your damages is by filing a claim on the uninsured motorist coverage you have with your policy. This coverage will generally cover an accident involving an uninsured driver no matter who was driving your car. In this case, even though your friend was driving your car, your coverage should still kick in and cover the damages.

If your friend caused it

If the accident turns out to be your friend's fault and if he or she was the driver, there are a lot of different possibilities with how the coverage will be determined. The first factor involves the types of coverage you have. If your policy contained collision coverage, it will likely cover the cost of all the damages. When the damages from an accident are really high, it might require using the driver's insurance policy as secondary coverage.

You will end up with major problems in this case, though, if your friend did not have a valid license at the time that he or she drove your car.

As you can see, there are a lot of factors that will affect this type of incident. To learn more about auto insurance coverage, contact an agent today.  


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The Importance of Insurance

When you start thinking about getting insurance, it can be overwhelming to hear the advice from family and friends. While some people might encourage you to stockpile money and insure yourself, others might warn about the expense of paying for car repairs or a stay in the hospital. However, even the most conservative financial experts talk about the importance of having sound insurance. Because it can be difficult to find the right policies, I decided to create a website completely dedicated to providing free information about insurance. Every situation is different, but if you are like most people, you will need a decent homeowners, medical, auto, and life insurance policy to protect you from unforeseen circumstances.