From time to time, it’s almost certain that you will either rent a car for business or for vacation or maybe just borrow a neighbor’s pickup truck to use for a day or two! When you do this you may wonder….”Am I covered while I’m using a non-owned auto?”
Let’s take a look at this question from two different perspectives
1) Do I have liability coverage on my policy to protect me if I hurt someone or damage someone else’s property while driving the non-owned auto?, and
2) Do I have coverage to pay for the damage TO the non-owned auto?
Let’s look at the first question. If your Personal Auto Policy (PAP) is similar to the industry standard ISO policy, then the Named Insured, their spouse and their resident family members are typically covered for liability (this is the coverage that pays for the injuries or damages to others) while using ANY AUTO. That is extremely broad coverage.
What this means is that if you go borrow your neighbor’s car, and assuming you are driving it with their consent, then your policy will respond if you are involved in an accident and are liable for the damages. Not only that, but you will also more than likely be covered (and primarily) by the owner’s policy as well.
All policies have exclusions that could apply but in most cases, whenever you drive someone else’s vehicle, your policy will follow you. This is really very cool!! You don’t have to worry about asking the owner of the vehicle if they have insurance on their car because yours will protect you.
Now let’s take a look at the second question. Do I have coverage to pay for the damage TO the car that I am borrowing or renting?
Here’s how the industry standard policies typically would apply. Let’s assume that you have a car insurance policy covering two cars that you and your family own. On one of these two cars, you have full coverage. What this means is that you have not only Liability and Uninsured Motorists coverage, but you also carry Comprehensive and Collision coverages.
It’s these last two coverages that are used to pay for damage to your owned car in the event it is damaged. As long as you have Comprehensive (sometimes called Other Than Collision) and Collision coverage on at least one of your owned autos, you will also then have the same coverage on a non-owned vehicle that you rent or borrow.
This provision does vary state by state but the majority of states treat this situation as mentioned above.
The key therefore is to have one of your owned autos covered for full coverage. If you do this, you have both Liability coverage for damage or injuries you cause to others and you have Comprehensive and Collision on the vehicle that you are borrowing or renting. And the good thing is that these coverages that apply to the non-owned auto are automatically included at no extra charge.
Having said this, you still need to check your own company and their policy. Ask your agent if your current policy will allow the extensions of coverage we have just discussed. Also be wary of a lot of the “save 15%” type of auto insurers.
What often goes unsaid by these discount auto insurers is that they are providing you with inferior coverages that may limit your coverage only to owned vehicles. It really is true in most insurance policies………..you get what you pay for! Please don’t sacrifice your family’s financial security for a low-cost, low-limits, low-value auto insurance policy.
Find an agent who knows the differences and will take the time to explain them to you.
Please let us know if we can help you in any way!