Who your auto insurance will cover can vary by insurance policy. In most cases, it depends upon who gave permission to the other person to use the car. When you purchase a car insurance policy, you are asked what other licensed drivers reside with you. If you are married, your spouse will be named as an occasional driver on the policy. Any children with valid driver’s licenses residing in the home will also be noted on the policy.
If you have any licensed drivers residing in your home, even if they are not related to you, you are expected to include them as an occasional driver on your policy. When you add any occasional drivers to your policy, including your spouse or family member, their driving records will be checked. If they have a record of traffic violations or have been found at fault in past accidents, this can cause you to be charged a higher rate for your policy.
Most car insurance policies will cover any licensed driver that has been given permission to borrow the car. There are some policies that have an exclusion of who they will not cover. Sometimes they will only allow family residing in your home. They can also exclude any licensed driver under the age of 21.
If a friend borrows your car and owns a vehicle that is insured, their insurance will cover the accident. Only if their insurance limits are not high enough to cover all the costs will your insurance have to pay.