Your friend is in a pinch and asks to borrow your car. You say yes, of course. Or maybe you have a teenager in the house who is learning to drive, so you let them practice with your car. Most of us have been in one of these situations before. But is it a good idea to let someone else get behind the wheel of your car?
What if your friend gets into an accident while driving your car? Who will pay for the damage? If someone uses your car and they aren’t listed as a driver on your insurance policy, your insurance may not cover the costs.
Be sure to review your auto insurance policy and make sure other drivers will be covered if they borrow your vehicle.
Checking your insurance coverage
Car insurance coverage requirements vary depending on which state you live in. Each state will determine the minimum car insurance limits. The only exception is for drivers in New Hampshire; the state requires you to be financially responsible if you’re at fault in a vehicle accident whether or not you have coverage.
The four basic types of coverage include: bodily injury liability, property damage liability, personal injury protection (PIP) and uninsured/underinsured motorist protection.
Adding a person to your insurance policy
Although insurance might be a legal requirement in your state, there are no laws that require you to add other drivers to your policy. However, ensuring others are covered if they drive your car will protect you from paying huge out-of-pocket sums if there’s an accident.
>>RELATED: How much coverage do I need?
Can I add my teenager who lives at home to my insurance?
A teenager at home who hasn’t earned their driver’s license yet and does not own their own vehicle may not be required to be covered by your insurance. However, your insurer may raise your rates once the teenager in your home becomes of driving age.
If your child has signed up for a driver’s education course or is studying to take their learner’s permit course, you’ll want to add your child to your insurance policy. Many insurers offer discounts for student drivers who take a driver training course, maintain a “B” average in school or drive certain types of vehicles.
Give your agent a call to ask when is the best time to add your teen to your policy and discuss changes that will be made to your premium once you do.
Can I add a college student that doesn’t live at home?
Many parents choose to keep their college students on their insurance policy. It will likely save your son or daughter some money versus getting a policy on their own. However, your policy might not cover all of their assets while they’re living away from home.
Be sure to notify your insurer of the college student’s new address. If you fail to report a change of address, an insurer can deny a claim or may even void all coverage on your policy.
Can I add a roommate or houseguests to my insurance?
Do you and your roommate share a vehicle? If you live with a roommate that drives your vehicle, you may be able to add them to your policy. And you can both save on payments by sharing the bill each month. Friends living at a separate address are usually only allowed to be added temporarily. Make sure the other driver is licensed or has a clean driving record before adding them to keep costs low.
When you have houseguests over, do they borrow your car instead of renting one? In this situation, you can stay protected by adding someone to your insurance policy temporarily.
Can I add a vehicle owned by someone else to my policy?
Depending on which state you live in and in some circumstances, you may be able to add a vehicle to your policy that isn’t located at the same address. For example, a couple that plans to move in together soon may be permitted. However, if you both live at the same address, then any vehicles will be on the same policy with all drivers listed.
Keep in mind, anytime you add or change a vehicle or driver on your policy is when you should compare car insurance as your premium may change. Married couples can often receive discounts on their auto insurance, as long as both of your driving records are clean.
Does it cost extra to add a person to a car insurance policy?
There are a number of factors that go into determining the cost of auto insurance. Adding a person to a policy (especially a young driver) is certainly a factor that can drastically raise your rates. An analysis of rates by CarInsurance.com showed that adding a 16-year old male will increase your premium by 160%; adding a female of the same age will raise it by 125%.
Younger drivers tend to cost more to insure given they don’t have as much experience driving yet.
Ask for discounts to lower your premium
Adding someone to your insurance policy will impact your premium. But, you may be eligible for other discounts now. Here are some insurance discounts to ask your insurer about.
Student drivers - Teenagers may qualify for discounts by maintaining good grades in school or by taking a defensive driver safety course.
College students (away from home) - Ask your insurer for any rate adjustments while your son or daughter is away at school. If they didn’t take a car to school and aren’t driving your car as much, you could get a discount.
Driver courses - See if completing a driver’s ed or defensive driver course could reduce your overall premium.
Low annual mileage - If you add a driver to your policy that doesn’t use a vehicle often, ask if you would be eligible for a low-mileage discount.
Vehicles discounts - If the additional driver is only using an older car, check to see if any of its safety features quality if for a discount. Perhaps installing an alarm on the car could get you a discount.