This is actually a confusing topic for many people. Most think the person driving the vehicle who causes an accident is repsonsible to pay. However, that’s not the case.
Insurance follows the vehicle
When people say “insurance follows the vehicle” what they’re actually saying is when an accident or incident occurs, the at fault vehicle will be the insurance policy that is liable to pay for damages. The driver of the vehicle can be cited, however, the vehicle they were driving is still responsible to pay for the loss incurred. This applies even if they are not the owner or a listed driver on the policy.
Will this affect me long term?
When people understand this, the next two questions they ask are, will the claim count against me and can I be sued? The answer to both of these questions is, yes. Your policy is subject to an underwriting review every renewal and filing a claim may affect your premium for 3-5 years. The registered owner of the vehicle and named insured on the policy is also liable should the claimant file a lawsuit.
How do I protect myself?
For these reasons, there are some guidelines that are important to be informed of when writing your policy. As well as letting others borrow your vehicle. Depending on your personal assets, it’s crucially important that you carry the right amount of liability protection. And also purchase an umbrella policy if needed. Not only will your bodily injury portion of your policy cover medical expenses, but it will also cover legal fees.
Anyone who lives in your home and operates your vehicles regularly needs to be listed on your policy. However, you have the right to let anyone else borrow your vehicle at any time. Knowing that you are liable for what happens while your vehicle is on the road may make you reconsider to who and when you loan out your vehicle.
If this raises more questions for you, please give us a call. We are here to make sure you understand your policy and carry the coverage that protects you and your family.