At Paragon Independent Insurance Agency in Plano, TX, handing your keys to a friend or family member during the holidays is pretty common. Before you do, it helps to understand how your auto insurance actually handles things if the borrowed car is involved in an accident.
Your Insurance Typically Follows the Car
Most people assume the driver’s own insurance covers everything, but that’s not usually how it works. Your auto insurance typically follows the vehicle, not the driver. If a friend or relative is involved in an accident in your car, your policy is generally the first to respond. That means your deductible applies, and a claim could affect your rates, even if you weren’t behind the wheel.
What if Damages Go Beyond Your Limits?
If the accident’s damages exceed your coverage limits, the borrower’s own policy may step in as secondary coverage. Not everyone carries their own auto insurance, though. If the person driving your car has no policy of their own, you could end up with costs that your coverage can’t fully handle. That’s worth thinking about before handing over your keys.
Permissive Use and Frequent Borrowers
Most auto insurance policies include permissive use coverage, meaning your policy applies when you give someone permission to drive your car. That said, if the same person regularly borrows your vehicle, your insurer may want to know. Frequent borrowers may need to be added directly to your policy.
Don’t wait until something goes wrong to think this through. Reach out to Paragon Independent Insurance Agency in Plano, TX, to go over your auto insurance policy and make sure you’re fully covered before the season gets busy.
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