Car Insurance When Borrowing a Car — How Does it Work?

“Hey, can you run to the store for me real quick? You can use my car,” shouts your friend from across the room while tossing you the keys. As you hop in the driver’s seat, you break into a cold sweat. “What if I get into an accident? Will my insurance still cover me?” you mutter nervously to yourself as you shift the car into reverse.

Far and away, this is one of the most common concerns we hear from customers. Today, we’re breaking down what the basics of what you need to know when you borrow someone else’s car. Let’s get into it.

Does my car insurance cover me while driving someone else’s vehicle?

The general (general — not exhaustive!) rule of thumb is that car insurance follows the car, not the driver. Therefore, if you borrow a friend’s car, you would be covered under that friend’s car insurance policy up to the policy limits they chose. This is what’s known in the biz as “permissive use.”

It’s important to note that this counts for irregular and infrequent borrowing; if a friend drives your car to work every Tuesday, your insurance carrier may feel differently about it.

What about my mom/dad/sibling/roommate’s car?

Usually, driving-age family members who live together should all be on the same insurance policy, making it just fine to swap cars. If not, they should be formally excluded from each other’s policies; importantly, a driver is generally not covered by a policy they’re excluded from, meaning you should never loan your car to someone you’ve excluded.

Roommates who aren’t direct family members can fall in a gray area; it’s a good idea to check with your insurance carrier about what’s allowed, but usually you’ll want your roommate to either be listed on or excluded from your policy.

What is primary vs. secondary coverage?

When claims get complicated, insurance companies spend time working out who is primarily responsible — that is, taking point on paying out damages — and secondarily responsible — or kicking in only when the primary coverage is exhausted.

As we mentioned, if you give someone permission to drive your vehicle, your car insurance usually takes primary coverage status. If damage exceeds your coverage limits, the driver’s policy may take over as secondary.

Am I covered if I’m using a borrowed car for business?

Here’s where things get sticky.

Some vehicles are covered by commercial policies for business use, but it gets complicated when a car is borrowed or swapped around for a use that’s out of the ordinary, or if a personal vehicle is used for some kind of transportation service (eg, Uber, Lyft, Postmates). There are lots of ins and outs and exclusions when it comes to commercial use, so it’s worth doing your homework before borrowing a car in a situation like this. 

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We hope this helped demystify the insurance implications of borrowing a car! But remember: when in doubt, check the specifics of the car insurance policy in question before getting behind the wheel. If you have any lingering questions (or any questions at all, really), do get in touch. We’re here to help!

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Julianne Sawyer is a freelance writer, app producer, and real-life Metromile customer living in the San Francisco Bay Area.