Published: August 2016
Whether it's the friend you've known since grade school or your trusted roommate, you may not think twice about sharing your stuff with those close to you. But what about your car?
Maybe you've loaned your car to a friend for a quick trip, or maybe you're thinking about going in on a car with your roommate. If so, you may be wondering whether you can share a car insurance policy or add your friend to yours. If you have a friend or roommate who will be driving your vehicle, here are a few scenarios to consider.
If you're sharing your living space and expenses with a roommate, it may also seem like a good idea to share a car. While that may be convenient, it's a good idea to have your bases covered when it comes to insurance. If you own a car but your roommate does not, the insurance policy for the car needs to be in your name.
In situations where each friend living at the same address has their own vehicle, you'll each need to have your own auto insurance policy. If you are likely to drive each other's cars, check with your agent to be sure your coverage extends to other drivers and to learn whether you should include them as operators on your policy.
Generally, people listed on an auto insurance policy must be the owners of the vehicle or related to the owner. You typically will not be able to add a non-related driver who does not live in your home to your policy.
If you and a friend own a vehicle together but do not live at the same address, you may have trouble obtaining an auto insurance policy. A local agent can help you determine the best way to handle this situation.
In most cases, the auto insurance policy covering a vehicle is the primary insurance, regardless of who is driving, the Insurance Information Institute says. If your car is involved in an accident, your insurance will likely help cover the cost of damages — even if your friend was driving at the time. Your friend's auto insurance may also be used as secondary coverage, particularly if the claim for the accident exceeds your policy's coverage limit.
It's important to understand your auto insurance coverage before you share your vehicle or purchase one with a friend. Talk to your agent and be sure that you, your friend and your vehicle are covered.