Does your auto insurance REALLY cover anyone to drive your vehicle? Or are you taking big risks!!!
This is a common question that I receive from prospects, and clients.
Does my insurance cover anyone who drives my car? Many insurance companies tell people that yes they are covered, when in fact they are not covered as much as they may think.
Quite a few insurance companies out there do not write what we call "permissive use" policies, many of which you might think they would. This means that although your coverage's may look the same for the liability limits 250/500/100, they are in fact much different when you lend your vehicle to others. Insurance companies that do not write a permissive use policy will only pay out the state minimum of liability limits which is 15/30/5, if you are sued due to an accident where someone not listed on your policy was driving your vehicle.
Many people that I speak with say, "Oh I never let anyone drive my car......" when in fact most of them probably have. Here is a recent true story concerning this coverage.
A local resident was going to play basketball at their church with one of their other neighbors. While playing, the owner of the vehicle twisted his ankle so he asked his neighbor to drive them home. On the way home, they had a major accident. Long story short, the owner of the vehicle was insured by an insurance company who did not write a permissive use policy, and when he got sued he ended up having to pull out $500,000 out of the equity of his home.
Is it worth it to save $20 bucks a month? In fact, if you have a good driving record, you can often get insurance with one of the top insurance companies for the same price or less than the discount companies.
Most importantly, make sure you are buying insurance from someone you can hold accountable. Anyone can tell you that you have the coverage, but will you be able to speak with them when you have an accident and you are told different by the claims adjuster?
In California if you do not have the money or the equity, the court can actually have your wages garnished just like child support for accidents that you are legally responsibe for.
State Minimum Limits of Liability
$15,000 Bodily injury pay out per person in the other vehicle (pays out for medical bills, pain & suffering, loss of work, etc.)
$30,000 Total bodily injury pay out
$5,000 Total property damage of other vehicle
Does my insurance cover anyone who drives my car? Many insurance companies tell people that yes they are covered, when in fact they are not covered as much as they may think.
Quite a few insurance companies out there do not write what we call "permissive use" policies, many of which you might think they would. This means that although your coverage's may look the same for the liability limits 250/500/100, they are in fact much different when you lend your vehicle to others. Insurance companies that do not write a permissive use policy will only pay out the state minimum of liability limits which is 15/30/5, if you are sued due to an accident where someone not listed on your policy was driving your vehicle.
Many people that I speak with say, "Oh I never let anyone drive my car......" when in fact most of them probably have. Here is a recent true story concerning this coverage.
A local resident was going to play basketball at their church with one of their other neighbors. While playing, the owner of the vehicle twisted his ankle so he asked his neighbor to drive them home. On the way home, they had a major accident. Long story short, the owner of the vehicle was insured by an insurance company who did not write a permissive use policy, and when he got sued he ended up having to pull out $500,000 out of the equity of his home.
Is it worth it to save $20 bucks a month? In fact, if you have a good driving record, you can often get insurance with one of the top insurance companies for the same price or less than the discount companies.
Most importantly, make sure you are buying insurance from someone you can hold accountable. Anyone can tell you that you have the coverage, but will you be able to speak with them when you have an accident and you are told different by the claims adjuster?
In California if you do not have the money or the equity, the court can actually have your wages garnished just like child support for accidents that you are legally responsibe for.
State Minimum Limits of Liability
$15,000 Bodily injury pay out per person in the other vehicle (pays out for medical bills, pain & suffering, loss of work, etc.)
$30,000 Total bodily injury pay out
$5,000 Total property damage of other vehicle
Add a Testimonial/Comment
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Comment by B. Jason Perry on March 11, 2008 at 6:21pm -
This is a very good example of what I was trying to explain. Although I don't know all the details, it is normal for the owner's insurance to pay as it is their vehicle. They also have to pay for any liabilities that are caused which is why it is very important to know whether your insurance contract will cover other drivers or not because if not, you could lose all of your assets.
Each insurance company has a different contract so for me to answer who is right or not would be hard to do. My best advice would be to get an attorney involved because the statement "driving the car too much" is not a valid response for rejecting coverage. You are either covered or you are not. How do they know how much he has driven the car?
The quality insurance companies that I've worked for in the past don't look for reasons not to pay, but they do make sure that they legally have to pay before they do. I can tell you right now what insurance companies they don't have, and which insurance companies they might have.
Feel free to give me a call to discuss this more. That is biggest benefit for my clients to be able to call me, one who has a vested interest in their business
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Comment by Melinda Stone CBC on March 11, 2008 at 3:57pm - Wow, what a thought--never occurred to me to check this. Thanks for posting it. Here is a personal story: My son just had an accident while driving another's car & his insurance company wants the vehicle owner's insurance to pay and they are saying NO because he drove it too frequently! (He is an adult but it was his Dad's car, which he did borrow occasionally) Who is right? Seems like the agenda is always to try to get out of paying--and here there are TWO insurance companies involved. Scary!
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