Why insurance follows the car

If you let your best friend borrow your car and he speeds through a red light and crashes, whose car insurance policy pays for damage done to your car and others harmed in the accident?

If you said his, you’d be dead wrong.

Typically, an auto insurance policy follows the car. Thus, as the car owner, it’s your policy — and your future car insurance rates — at risk if someone who borrows your car causes an auto accident.

Why are you on the hook even when you aren’t the one driving?

Mostly, it’s because many drivers don’t have insurance policies in their own names — teenagers, for example. A state-mandated liability car insurance policy linked to the vehicle ensures that there is always a way to pay if any driver of the car is at fault for injuries or property damage.

Here’s a rundown on which types of car insurance coverage follow your car and which follow you as a driver, so you won’t be left wondering, “If someone borrows my car, is he or she covered under my auto insurance?”

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