Question: I’m going on a summer road trip through a few states with a few friends. Will my auto insurance cover them to drive my car or will each driver need their own coverage? Am I covered for going out of state?
Answer: Typically, car insurance goes with the car. That means the other drivers should be covered under your auto insurance policy once you hit the road.
We say should, because the terms of car insurance policies vary, according to state laws and your personal auto insurance provider’s guidelines. But make sure your policy covers "permissive users" before you leave. There are no do-overs if there's an accident. (See “Who can drive your car?”)
Look over your exclusions and restrictions to make sure that drivers of any age are covered to use your vehicle; some policies have age restrictions and won’t cover any driver under the age of 21 or 25. Some very restrictive policies may limit coverage only to the named insured (you).
Auto insurance is set up so that liability coverages and physical damage coverages (collision and comprehensive) follow the car, not the driver. So, if one of your friends crashes your car while on the trip, your liability coverages would cover others that were harmed. If you have collision coverage, it would pay to fix your own vehicle, even if you weren't behind the wheel.
Your friends, thus, don’t need to have auto insurance coverage of their own; you just need to verify that they are properly covered under your policy to drive your car.
Remember that even if you aren’t driving at the time of an accident, you (as the car owner) can be held responsible, along with the driver, for any damages that your car insurance company doesn’t cover because you’ve exceeded your limits. For this reason, it’s a good idea to make sure your policy limits are high enough to cover a serious accident. (See “Expensive car, cheap car insurance”)
If your friend has his own policy, then it could be used as secondary coverage if your liability coverages were exceeded.
The insurance industry recommends $100,000 per person and $300,000 per accident for bodily injury liability (written as 100/300) and at least $50,000 for property damage liability. If you don’t have any real assets, then you may be fine with the lower limits; our auto insurance coverage calculator can help your determine what is right for you.
As for being covered while out of state, with most auto insurers your policy will not only cover you out of state but also raise your liability limits to match that state’s mandated liability limits if you’re in an accident, if need be. If you or your friends receives a traffic ticket far from home, the department of motor vehicles in your home state will hear about it, and so will your insurance company.
If you have any questions about what is covered for your road trip after reviewing your policy, call your insurance agent to verify your coverages before starting off. And remember to carry a physical copy of your insurance card with in the car so that it’s available if you’re in an auto accident or need to show it to law enforcement.
Lastly, if one of your friends does have an accident while driving your car, it could affect your future car insurance rates since any claims will be against your policy. If your rates go up, it’s not the end of the world, by doing a little comparison shopping you could find an insurer that doesn’t rate on accidents as harshly and you may even end up saving money.