Wednesday, June 15, 2022

Do You Insure The Car Or The Driver

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What Is Third Party Car Insurance

Does auto insurance follow the car or the driver?
  • Third party car insurance is the minimum cover you legally need to drive. There are two types of third party: third party only or third party fire and theft.

  • In the event of an accident, your insurer will pay for any damage or injuries to third parties, their vehicles or property. It will not pay for repairs or replacement of the car you were driving.

  • So if you’re driving a friend’s car and have an accident, you could be liable for any repair bills to their vehicle as this won’t be covered by your insurance. This level of cover will likely cover injuries caused to any third parties, including your passengers, but not to yourself.

  • Some insurers also state that even if you have commuting and business use on your insurance, only social driving will be covered if you drive someone elses car. The devil is in the detail so always check the policy wording.

Read our guide on the different types of insurance to learn more about third party only , third party, fire and theft , and comprehensive insurance policies.

Primary Vs Secondary Coverage

According to Policy Genius, Cover.com, and esurance, if a person has an accident in a borrowed car, their auto insurance policy provides primary coverage. The car owner’s insurance will offer secondary coverage if the liability in the incident exceeds the driver’s auto insurance policy. For this reason, you should avoid lending out your car to a person who does not have their own auto insurance policy. If they have an accident, you will be responsible for costs that exceed your own policy limit.

Where Can I Get Nonowner Car Insurance

Major insurers including State Farm, Geico, Progressive and The General offer nonowner insurance. While most major auto insurance companies offer non-owner auto insurance, you must call the insurer directly to get a quote.

Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Anamarie Waite Car Insurance Writer

Car insurance usually follows the car in Washington. The types of car insurance that follow the car in Washington are bodily injury liability, personal injury liability, collision, and comprehensive. Youre required to carry bodily injury liability and property damage liability in Washington.

If you let someone borrow your car and they cause an accident in Washington, bodily injury liability insurance pays for injuries to the other driver and their passengers. Property damage liability insurance will pay for damage to the other driver’s car. If the person who borrowed your car causes damage that exceeds your coverage limits, their liability policy can act as secondary coverage. But their coverage only kicks in after yours is tapped out.

You wont need to use your PIP or MedPay coverage if someone caused an accident while driving your car because PIP and MedPay follow the driver. You will have to use your collision and comprehensive insurance to pay for damage to your car, though. These optional coverage types pay for your car to be fixed no matter who was driving, but it is a claim on your policy.

Its always a risk to lend your car to someone else, because you could definitely end up filing a claim using your own insurance in Washington. When someone borrows your car, they also borrow your insurance coverage in most cases.

How much bodily injury liability should you have?

You Typically Borrow A Car From Someone In Your Household

Does your insurance cover you to drive a friend

If the vehicle you drive most often belongs to a person you live with, you should generally be listed as a covered driver on their car insurance policy rather than getting non-owner insurance. Thats because, depending on where you live and which company insures the vehicle, coverage might be denied if every driving-age member of the household isnt listed on the policy.

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Why You Need Car Insurance

You must have car insurance if you own a car or other vehicle.

Car insurance may protect you from:

  • having to pay to repair your car or other vehicle if it’s damaged or in an accident
  • liability claims if you’re held responsible for an accident causing damage to another persons vehicle or injury to other people

Insurance companies may refer to car insurance as property and casualty insurance. Property and casualty insurance also includes home insurance, business insurance and disaster insurance.

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Will My Personal Auto Policy Cover Business Use

Your personal auto policy provides coverage for some business use of your vehicle. Similarly, your employees personal auto policies cover some business use of their vehicles too .

Even if not specifically excluded, how you use your vehicle may not be an acceptable risk to the insurance company under a personal auto policy. The insurance company may charge additional premium for certain business use or refuse to insure or cancel policies when the use presents too much risk. In these cases, a commercial auto policy may be the best solution.

If a vehicle is used primarily in business, there is likely no coverage under a personal auto policy. If you use your personal vehicle for work occasionally, your personal insurance carrier might be able to tailor your policy to reflect this usage. If the vehicle is owned by a business, there will be no coverage under a personal auto policy. A commercial auto policy would need to be purchased.

The personal auto policy, whether yours or your employees, may not have enough coverage to protect your business. For example, imagine you are driving your car to a business meeting while having an intense conversation on your cell phone with one of your sales reps. By the time you notice a van ahead of you has stopped to make a left turn, its too late to avoid a collision. The driver and five passengers are injured in the accident. They sue you and your company.

At What Age Does The Cost Of Car Insurance Go Down

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Generally, the younger you are, the more youll pay for car insurance

Thats because young drivers are statistically more likely to have an accident.

As they age and all other things being equal, their premium will generally come down.

This happens gradually there is no particular age at which the cost of car insurance suddenly drops.

However, age is just one of numerous factors taken into consideration when calculating a persons premium.

Claims history is also critical. It can mean a 40-year-old driver with two at-fault claims in the past two years, say, pays more for their cover than a 25-year-old with a driver rating of 1 who has had no claims.

To find out more about how car insurance premiums are calculated and how you can save on yours, read our How much does car insurance cost? article.

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The Difference Between Registered Keepers And Main Drivers On Car Insurance

Here’s where things get a bit more confusing.

Every car insurance policy has a “main driver”. This has to be the person who does most of the driving.

To get someone else insured on that car, you have to add them as a “named driver”. The main driver has to drive the car more often than the named driver. If they don’t, it counts as a type of fraud called “fronting”.

But the main driver doesn’t necessarily have to be the owner or the registered keeper. This is pretty common for married couples.

If you’re married, one of you can own the car and be the registered keeper. But if your spouse drives the car more often than you do, they’ll need to be listed as the “main driver”.

If the person who does the bulk of the driving changes, you’ll need to tell your insurer.

What Is Driving Other Cars Insurance

Driving other cars cover allows you to drive other insured cars without being a named driver or buying temporary cover. The car you want to drive must be covered by an existing insurance policy and you must have permission to drive it.

Driving other cars cover is usually only available on a comprehensive car insurance policy, so if you have third party cover, you wont be covered to drive any other cars. It’s not automatically included on every comprehensive policy so check first.

Unfortunately, driving other cars cover is not available to everyone.

Insurers will typically exclude DOC cover from your insurance policy if you are under 25, as youre seen as a higher risk to insurers. Those with criminal convictions or who have made an insurance claim on their own policy may not be able to get DOC cover either.

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What If You Live With Risky Drivers

You may be concerned about the expense of adding a risky driver who lives with you.

Say, for instance, your best friend just moved in with you. You love hanging out with themyou just don’t love their driving record. This new roommate doesnt own a car, and so you let them drive yours. Adding your friend as a driver to your policy could raise your rates due to their bad driving record. So, you try to get around it by not adding them as a driver.

But, you are taking a gamble in letting someone living in your household drive your car without listing them as a driver.

Depending on your insurance carrier’s rules, a claim could be denied if you intentionally didn’t disclose a household member with a risky driving record.

In some states, some policies would cover a claim with your roommate as the driver under “permissive use.” But you could run into trouble if you didn’t give that person permission to use your car. If they get into a wreck and don’t have insurance, you’re probably still liable for the damage to your car.

A good rule of thumb is to ask your insurance agent whenever you add a new driver to your household . If that person has a poor driving record, it is better to have them listed as an excluded driver than to not have them listed at all.

What Car Insurance Can I Get With A Suspended Drivers License

Do I need car insurance when learning to drive?

If your drivers licence is suspended due to unpaid fines, an accumulation of demerit points, or a high-speed offence, for example its illegal for you to drive.

Consequently, insurers may not cover any car you propose to drive.

Once your licence is reinstated, you may be able to get cover, though your premium may be higher due to your driving record.

As long as you hold a valid Australian drivers licence or permit, you can apply for Budget Direct car insurance.

If we ask you questions, its important to tell us anything relevant to our decision to ensure you and under what terms well then consider your application.

If we dont offer you cover, you may be able to find an insurer who will on the Find an Insurer website.

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What About A Teen Driver With A Permit

Again, it really depends on your policy. A learning driver may be covered as a permissive driver under your policy. Other carriers only require licensed teens to be listed. Your insurance agent can tell you whether someone who lives with you is properly covered and, if not, what you’ll need to change your policy.

Can A Person Be Denied Car Insurance

Yes insurers are not legally required to provide car insurance to anyone who requests it, though its rare for someone to be denied cover.

Among the reasons an insurer might deny someone cover are licence cancellations/disqualifications, drink and/or drug driving offences, criminal convictions or an adverse claims history.

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Can My Insured Car Be Kept At A Different Address To The One On My Policy

Car insurance premiums are partly based on the postcode in which your car is normally kept overnight and whether its kept in a garage, carport or on the street.

By normally, we mean most of the time.

For the majority of people, the location they normally park their car overnight is the same place they reside.

However, your Budget Direct-insured car is still covered if you keep it somewhere else overnight .

Just as long as you keep your car elsewhere less than you keep it in the postcode stated in your insurance policy.

Budget Direct car insurance is conditional on the policyholder and/or regular driver living at the same address the car is usually kept.

If you need to change the postcode where your car is mostly kept, you can edit your policy via your online account.

Insurance That Covers The Driver

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When it comes to making sure medical bills are covered for injuries sustained while driving, its usually liability insurance that comes into play. Most states require liability insurance, at a minimum, in order to legally drive. Liability insurance can extend to your passengers and the drivers and passengers of another car you have an accident with, especially if you are at fault.

In addition to liability insurance, there are extra policies you can purchase to make sure any and all injuries will have some kind of coverage. Med Pay insurance, which is specifically designed to pay for a designated amount of medical expenses per person can add extra peace of mind. Likewise, bodily injury insurance, which is similarly designed to help with expenses incurred as a result of a driving-related injury, can add extra protection in the event of an accident that results in injury to one or more people.

If you want to talk more about car insurance coverage, call and speak with someone at Obrella.

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Can I Drive My Friends Car If I Have Insurance

Similar to the scenarios above, if you drive your friends car and get into an accident that was your fault, it most likely will be their auto insurance coverage that will be affected. Remember, even if you have better insurance than them, the insurance usually follows the car. So theyll probably file the claim, pay the deductible and face the potential higher rates. Again, make sure you both are on the same page as far as who will pay the deductible if you get into an accident while driving their vehicle.

Can I Buy Car Insurance Before Purchasing A Car

It takes less than an hour to buy car insurance, so most people buy it on the same day they purchase the car, before driving it.

You can, however, buy insurance ahead of time if youve agreed to purchase the car from a dealer or private seller and are able to provide us with the following details:

  • year
  • dealer options and/or non-standard accessories
  • modifications
  • registration number.

If you replace your Budget-Direct-insured car with a similar one, well automatically provide the same level of cover for your replacement car for 14 days from the purchase date even if you dont contact us.

Your replacement car will be temporarily insured for its market value or purchase price, whichever is lower.

Youll just need to make sure you update your existing policy before the temporary cover expires.

All vehicles in Australia must have compulsory third party insurance before they can be registered and legally driven on the road.

If the car youre buying is already registered, the CTP insurance will be transferred to you you wont have to buy CTP insurance for the car until the current registration expires.

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The Coverage Limits Of The Person Who Lends The Car Have Been Reached

In the case where the amount needed to repair damage from a collision exceeds your insurance policy’s “limits”that is, the maximum amount the policy will pay for repairsthen the driver’s coverage policy might have to step in to cover what yours can’t.

Of course, this only applies to situations where the driver’s coverage limits are higher than the car-lender’s coverage limits.

Does Automobile Insurance Follow The Car Or The Driver

Texting and Driving Tickets

A common question newcomers to auto insurance have concerns how a car policy functions. Does insurance cover the car or the driver? Its a reasonable question, since motorists frequently drive other vehicles or lend their cars to other drivers. Usually, a policy issues to a specific vehicle, identified by its unique Vehicle Identification number, or VIN. There are cases where insurance coverage extends to the driver when they use other vehicles.

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You Frequently Use A Car

Car-sharing services such as Zipcar and Turo offer some coverage for drivers, but its often just enough to meet your states minimum requirements. If you cause a bad wreck, costs could easily exceed the minimum limits, and youd be responsible for them. A non-owners policy can supplement this coverage.

Making An Insurance Claim Against Someone Else

If someone else crashes into you, in the simplest scenario youll make a claim against their liability insurance. This is called a third-party claim: Youre the third party to the other driver and their insurance company.

The other persons insurer will process the claim, but dont count on a quick payment. The insurer might want to investigate the accident to determine that their customer truly was at fault.

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