Woodland Hills personal injury attorney Barry P. Goldberg is regularly consulted on accident cases where the driver involved is driving someone else’s vehicle. “Baby you can drive my car” might have some unexpected consequences. After an accident, consumers always ask “Does the Automobile Insurance follow the car or the driver?” The answer to this question can cause significant confusion that even experienced lawyers get wrong from time to time. Here is my attempt to simplify the answer!
Whether “insurance” follows the car or the driver depends on what kind of coverage is at issue. There are coverages that follow the car and there are coverages that follow the driver. Further, there can be overlapping coverages—-so, the answer may be “both” in some circumstances.
As a general rule, liability coverage in an auto policy follows the driver no matter whose car is being operated. In other words, liability coverage protects the insured when he or she is operating some else’s vehicle. If someone else owns the vehicle, the driver may also be covered by the owner’s liability policy when the policy exceeds the coverages of the driver.
On the other hand, first party property coverages such as Comprehensive and Collision coverage are inextricably tied to the listed insured vehicle. These coverages apply to damage to the insured vehicle such as vandalism and damages from a crash, regardless of fault. Generally, there is a deductible that also applies. Be careful, however. If the driver of the damaged vehicle is specifically excluded, the Comprehensive and Collision may not apply.
When an insured allows other drivers to drive his car, the question becomes whether that driver is a “Permissive User” under the policy and California law. According to California law, an insurer must insure a permissive user to the same extent as the named insured. There are some very big exceptions and this is where advice of counsel is really required before speaking to the insurance company regarding the loss. If the permissive user is a member of the insured’s household and that fact was not disclosed to the insurer, the claim could be excluded. Also, if the car is “furnished for the regular use” if the permissive user, coverage will be excluded.
Many well-meaning California consumers think they can outsmart the insurance company by buying insurance in one name, then “loaning” the vehicle to another without paying an additional policy premium. Not so! The question comes down to the circumstances of the loan. If it was very temporary, say for one day or while the permissive user’s car is in the shop—no problem. However, if there are not clear time restraints and the permission was relatively unlimited, then no coverage!
Medical Payments coverage and Uninsured Motorist insurance follow the insured person. In fact, an insured has coverage even if he or she is walking or biking! Passengers in an insured vehicle are also covered for Med Pay regardless of fault.
So, if you want to be a “star” and loan your “car”, you might want to check with your insurance agent first. If a loss occurs with a driver in a non-owned vehicle, we suggest consulting with an experienced accident attorney with coverage experience right away. Usually, the complexities of which coverage applies and the possible exclusions are too much for the lay person to navigate safely on his or her own.
