How it works
The NAIC notes that almost all liability policies cover a licensed driver who drives your car with your permission, but that some policies state that no one else is covered. The Texas Department of Insurance puts it the same way: most policies cover you, your family and people driving your car with your permission.
What this means when you lend your car:
- Your policy pays first. If a friend causes a crash in your car, Texas explains that the owner's insurance pays the claim. The friend's own policy may pay if your coverage is missing or not enough.
- Your limits and deductibles apply. The claim is made under your policy, so your liability limits cap what it pays for others, and your collision deductible applies to repairs to your car.
- Exceptions exist. A driver named in an exclusion is not covered. Some insurers also require everyone of driving age who lives with you to be listed on the policy, so a household member who is not listed may be treated differently from an occasional borrower.
Read your policy or ask your agent who is covered before lending your car regularly.
Related terms
Sources
- NAIC, Auto insurance consumer information coverage for licensed drivers using your car with permission
- Texas Department of Insurance, Auto insurance guide who most policies cover, borrowed cars, listing household drivers
Last reviewed by the StateCover Guide editorial team. See our editorial policy. Spotted an error? Tell us.