How Does Car Insurance Work When Driving Other People\’s Car?

25. February 2010 · Comments Off · Categories: Insurance · Tags: , , ,

Auto insurance is insurance purchased for cars. Its principal objective is to provide protection against losses incurred due to traffic accidents and liabilities subjected to accidents and car thefts. The majority of jurisdictions across the globe make it imperative to have assurance auto coverage before driving the vehicle on the public road. Insurance for both car and driver is mandatory by most governments of the world. Does that mean in occurrence of an accidental injury, your insurance policy will pay for your loss or someone else\’s? How does car insurance actually work when driving other people\’s car? This article aims at answering a pertinent question, which many of us seek to find answers to when stuck in a controversial situation.

A Personal Auto Insurance policy will cover the damages and medical liabilities of an uninsured motorist, operating your personal vehicle. In certain cases your personal insurance will cover the property damage as well. However, it will \”not\” provide cover for the operation of a hired business or commercial use vehicle.

It should be noted, that the car is insured, and not the driver. In case of a \”personal\” vehicle being driven, which has an adequate active coverage, the policy will be liable for the auto damage and the medical liability of the driver. However, if the \”personal\” vehicle insurance stands inadequate, then a part of the driver\’s own active insurance policy will provide the medical benefits or the damage cover. The degree of coverage depends on factors like rentals, loaners, local or state regulations and reasons driving the other vehicle.

The assurance auto Montreal policy in force will cover the vehicle damage only if the driver had the owner\’s \”permission\” to drive. Hence also covering the liabilities of the other parties involved. The insurance will also follow the driver, if they are mentioned in the policy of the car owner.

Insurance coverage varies with state. While, in some states, the policy will cover both the vehicle and the driver, whether or not the driver is enlisted in the policy of the car owner. Simultaneously, the car owner\’s policy will provide coverage for him when he\’s in the driver\’s seat of another owner\’s \”personal\” vehicle.

Most auto insurance policies will cover any driver of the insured vehicle, unless that driver has been excluded from the policy or unless the driver has stolen the vehicle. This would require the owner to press his situation, by providing a copy of the filed theft report or the filed exclusion report.

Since auto insurance follows the vehicle, if you\’re driving a borrowed car and get involved in an accident, the lender\’s insurance policy will cover the liabilities, your medical expense and the other vehicle\’s damages. But, if the lender has no insurance or his insurance is inadequate, then the borrower\’s insurance will step-in and cover all of the losses.

Car insurance companies offer \”Drive Other Cars\” advantage on the owner\’s insurance policy to combat such situations. This policy provides comprehensive coverage on a driver who has the owner\’s permission, as well as third party coverage for any injured individual in case of unexpected accidents. Different insurance companies provide different terms and conditions in order to receive \”drive other car\” benefits, and some may not even provide this advantage. Therefore, it\’s advisable that you call your insurance company before lending or borrowing a car.

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Is Lenders\’ Car Insurance Liable For Borrower And Third Party Damages?

20. February 2010 · Comments Off · Categories: Insurance · Tags: , ,

Most auto insurance companies offer a \”Drive Other Cars\” advantage on the owner\’s insurance policy to provide comprehensive coverage on a driver who has the owner\’s permission, as well as third party coverage for any injured individual in case of unexpected collision. Does that mean a driver can access a lender\’s 3rd party car, or the driver is restricted to a limited number of cars under the insurance coverage?

It should be noted; that assurance automobile is for the car and not the driver. Third party insurance coverage limits the driver to accessing only the 3rd party vehicles, and if the driver is engaged in an accident, the liability of covering the damages for the hit vehicle would come from the driver\’s 3rd party insurance cover. The owner\’s auto insurance policy will follow the damages for the borrowed vehicle used by the driver.

Under 3rd party insurance cover, irrespective of the horsepower of the vehicle, the driver must use \”only\” the 3rd party vehicle. The insurance stands void if the vehicle used is not covered under the policy terms and conditions. It\’s advisable to contact your insurance company to qualify your position before you venture out in a lender\’s car.

For selecting an effective assurances auto policy, users must compare the benefits and rates of all the available policies in their state or county. An online comparison is the most convenient and effective way to choose a policy. Ensure that you use similar parameters, while making comparison – similar policies with similar limits and similar locations, will allow you to judge the best insurance coverage with added benefits for the lowest possible premiums.

However, if you wish to drive cars with various horsepower, then both the car and you needs to be insured. Under this scenario the 3rd Party auto insurance policy will cease to exist. Insurance companies that provide 3rd Party coverage, may exclude comprehensive coverage for fire and theft, especially when the car is over thirty years old. Replacing car parts, which are not readily available in the market, would prove to be very expensive for the insurance company, and they may recommend visiting a classic car insurer.

Third Party Insurance covers both personal injury and property damage. This policy holds unlimited amounts coverage for death or injury of the victims – pedestrians, occupants of other vehicles, outsiders other than passengers and employees connected with operation of the vehicle. Hence, the insurance coverage is most applicable to the victims, not the policy owner.

Third Party Insurance is compulsory in most countries like Australia, UK and India. For a motorist to drive on UK roads, it is a legal requirement to have at least third party only (TPO) car insurance. In India having insurance in place is a mandatory requirement for your vehicle registration. The Insurance Commission of Western Australia is the only provider of Compulsory Third Party Insurance in the western part of the country.

In the United States, Third Party auto insurance is compulsory, though different states enforce the requirements differently.

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