Does Your Friend's Auto Insurance Policy Cover You If You Borrow His Car?

Occasionally, you may need to borrow your friend's car to run an errand, go to work or complete some other task. When you do this, do you know if you're covered by your neighbor's auto insurance policy?

In most states, the answer to whether you're covered or not depends on how much you're using the vehicle and what you're using it for.

As always, auto policies may differ by state, so be sure to check your state's policy to see how you're covered.

For states that don't require you to use your own auto insurance policy, regardless of who's at fault for an accident, here are things to consider before you borrow a friend's car.

How Often Do You Use the Car?

If you only borrow your friend's car once a month, most likely your friend's policy will cover you when you drive the vehicle. An auto policy will define who it covers, which you can find in the definitions sections. In this instance, look for the definition of an "insured person" to see who's covered.

For example, an "insured person" may include "any person with respect to an accident arising out of that person's use of a covered auto with the permission of you or a relative." Under this definition, if someone else gives you permission to drive his vehicle, you're covered by his insurance policy — as long as your other actions with the vehicle also fall within policy allowances.

How Long Do You Borrow the Car?

Another consideration is how long you're borrowing your friend's car. If you use the car for a day or two, most likely that's not considered regular and frequent use. However, if you borrow your friend's car for several weeks, you may not be covered by his auto policy. In cases like this, you most likely would be considered a regular user, which means you should be added to your friend's insurance policy if you use his vehicle in this manner.

Why Are You Using the Car?

Finally, consider why you're using your friend's car. If you're using the vehicle to conduct business, like delivering pizza or hauling equipment for a landscaping business, you'll need to make sure the vehicle is covered under a commercial auto or business insurance policy. Personal auto policies typically don't cover anyone for conducting business with their vehicles.

Auto policies have long lists of actions and circumstances that aren't covered, so make sure you check to see what's covered before you drive your friend's vehicle.

CT Among Leaders in Health Insurance

HARTFORD - Connecticut is far ahead of other states in designing a health insurance exchange, a long-awaited option for people stuck in the expensive individual health market or who have no health insurance.

Major decisions on the exchange are being made now to have it up and running by October 2014 when open enrollment will take place until March 2015.

 

To read more the rest of the article click the link below:

Connecticut Among Leaders in Developing Health Insurance Exchange

Busting Car Insurance Myths!

Have you ever heard that if you drive a red car that your rates will be higher? What about age: who pays more; seniors or teens?

 

Find out the answers to these myths and more when you click here: Five Car Insurance Myths.

How to Know if You Have Enough Auto Insurance

When is the best time to find out if you have enough car insurance? Most people wait until they're pulled over on the side of the road following a vehicular accident or after a careening tractor-trailer scares you into checking the coverage in your policy.

Does it really make sense to pay more for maximum coverage? And what does it really mean to be underinsured anyway?

Some of this isn’t up to us, because most states require you to have at least some auto insurance. Still, it’s worth looking at a couple of areas where vulnerability can be particularly high: liability insurance (in case you hurt or kill someone else) and the uninsured or underinsured motorist coverage.

Then, we can see what our odds are of needing to make a claim and how comfortable we are making bets accordingly.

First, the facts. The approximately 210 million licensed drivers in the United States had an estimated 5,419,000 crashes that police took reports on in 2010, the most recent year that the National Highway Traffic Safety Administration has data. Those crashes killed 32,885 people and injured 2,239,000.

For every 100 million vehicle miles that people traveled, there were 75 injuries, including those to pedestrians, and there were 1,066 injuries for every 100,000 licensed drivers. How costly were those injuries? When accidents happen and the disputes wind up in court, they don’t tend to generate enormous payouts. According to a service called Jury Verdict Research, the median jury award for liability cases in 2010 for vehicular accidents was just $19,806.

That said, outsize awards are common enough (topping out at just over $13 million that year) that the average award was $181,197. And according to ISO, an insurance risk information service, about 5 percent of bodily injury claims in 2010 were for more than $100,000 while about 2 percent reached $300,000.

The odds of running into people with no insurance at all to pay for your claims against them are probably higher than you think. The Insurance Research Council’s most recent estimate, from 2009, is that 13.8 percent of all United States drivers have no insurance at all. In Florida, it’s 23.5 percent, and in Michigan it’s 19.5 percent.

ISO estimates that about 20 percent of people who do have insurance purchase just the minimum liability coverage in case they hurt someone else. Their policies may pay out as little as $25,000 in many states. That’s why Kirby Francis remains glad six years later that his parents had $500,000 in underinsured motorist coverage back when someone crossed a highway line in Oregon and plowed into him head-on while he was driving home from college.

The other driver, who ended up dead in a canyon 200 feet below the road, had just $50,000 in coverage. By the time Mr. Francis punched his way out of his burning vehicle, with a lacerated spleen, a broken tibia, and his elbow in six pieces, he was in need of $130,000 in operations and other medical care, including radiation treatments for his arm that his health insurer wasn’t going to pay for. He also said that he received a $200,000 settlement for his troubles, beyond the reimbursement for medical costs that mostly went to his health insurance company.

So we begin with these basic facts, and then there are other people’s stories. But in the end, there’s just you and me, and if we’re honest with ourselves, we’ll acknowledge the specific risk factors that leave us particularly vulnerable. We may drive drunk, tired, quickly, at night or with a mobile phone in one hand.

Perhaps there are children in the back who are distracting, maybe even an entire car pool full of ones whose parents would sue pretty quickly if they were injured on your watch. Or your children have just learned to drive. Or you’re starting to make the same mistakes behind the wheel that you did 60 years ago.

So what would it cost to lock in better coverage? The industry-supported Insurance Information Institute figures it costs about $200 extra annually per vehicle to take your liability limit from $50,000 to $1 million per accident. Gonzo drivers with sketchy records may pay more. Raising your uninsured and underinsured coverage by similar amounts could cost less than half that amount.

Taken together, that’s not an enormous amount on a percentage basis on top of what may be an annual insurance bill of $1,000 or more.

Still, many of us will tell ourselves all sorts of stories about why this isn’t necessary. For instance, we may figure that no one is going to come after us beyond whatever minimum amount our insurance policy will pay. But if you’re at fault and don’t have enough insurance, the job of plaintiff’s lawyers is to track down both the assets you have now and the ones you may accrue later. They may keep an eye out for any future windfall long after any judgment and then try to use it to satisfy whatever you still owe.

Or perhaps we think we’re suckers for buying more insurance, since those same lawyers will then inflate claims in order to extract money from both the insurance company and our assets.