Most auto liability insurance policies cover privileged insureds (e.g. resident relative, spouse and named insured) if driving a nonowned motor vehicle. It is called Nonownership Or “Drive Other Cars” Coverage.
Here, you will see several examples of when you are covered for using someone else’s car.
Example #1 (Named Insured driving a nonowned car)
Justin owns a car that State Farm insures. He drives a friend’s car and hits another car that Mike is driving. Justin is cited for careless driving. Mike has neck injury as a result of the accident and wants to make a claim against Justin.
Justin’s auto insurance policy with State Farm should cover Justin up to the limits of bodily injury (B.I.) liability coverage. Let’s assume that Justin has $10,000/$20,000 of BI on the policy. In this instance, State Farm would pay Mike up to $10,000 for Mike’s injury.
In order for State Farm to pay Mike the $10,000 policy limits, Mike’s damages (out-of-pocket medical bills, lost wages and pain and suffering) need to be worth $10,000.
Example #2 (Spouse driving a nonowned car)
Justin owns a car. He has auto insurance through State Farm. Justin is married to Monica. Monica drives a friend’s car and hits another car driven by Mike. Monica is cited for careless driving. Mike has neck injury as a result of the accident and wants to make a claim against Monica.
Justin’s auto insurance policy with State Farm should cover Monica up to the limits of bodily injury (B.I.) liability limits on the policy. This is because Monica is married to Justin and Monica is driving a nonowned motor vehicle. So if Justin has $10,000 of BI on the policy, State Farm would pay Mike up to $10,000 for Mike’s injury. Mike would have to prove that his damages (out-of-pocket medical bills, lost wages and pain and suffering) are worth $10,000 in order for State Farm to pay Mike the $10,000.
Example #3 (Resident relative driving a nonowned car)
Justin owns a car and has auto insurance through Geico. Justin lives with Ryan, who is Justin’s brother. Therefore, they are “resident relatives.” Ryan drives a friend’s car and hits another car driven by Mike. Ryan is cited for reckless driving. Mike has neck injury as a result of the accident and wants to make a claim against Ryan.
Justin’s auto insurance policy with Geico should cover Ryan up to the limits of bodily injury (B.I.) liability limits on the policy. This is because Ryan is a resident relative of Justin and Ryan is driving a nonowned vehicle. It is a nonowned vehicle because it is owned by Ryan’s friend. Some smaller insurance carriers in Miami have exclusions in the policy that will not provide coverage under the resident relative’s policy.
So if Justin has $10,000 of BI on the policy, Geico would pay Mike up to $10,000 for Mike’s injury. Mike would have to prove that his damages (out-of-pocket medical bills, lost wages and pain and suffering) are worth $10,000 in order for Geico to pay Mike the $10,000.
– Nonownership or “Drive Other Cars” Coverage only applies when one of the insureds is driving a vehicle in which he or she has no legal or equitable interest. If one of the insureds has a legal or equitable interest, there is no coverage.
In addition, if Ryan owned a car, his car insurance would also cover him for bodily injury to Mike. This would be in addition to Justin’s BI liability coverage.
Example #4 (Insured has legal or equitable interest – No coverage)
Justin owns several cars. One of the cars that he owns in not insured. All the other cars that he owns are insured through Imperial Fire & Casualty Insurance Company. Justin drives the car that is not insured and hits another car driven by Mike. Justin is cited for failure to yield the right of way. Mike has neck injury as a result of the accident and wants to make a claim against Justin.
Justin’s auto insurance policy with Imperial Fire & Casualty Insurance Company will not cover Justin for Mike’s damages (out-of-pocket medical bills, lost wages and pain and suffering) because Justin owned the car that he was driving but it was not listed on Justin’s automobile liability insurance policy.
– The purpose of the “drive other cars” part of an automobile liability policy is to cover occasional or incidental use of other cars without a raise in the premium. But, the insurance policy is not designed to cover the insured against personal liability if he or she uses an automobile that the insured used often or has the opportunity to use often but it is not declared as an insured vehicle.
For example, I’ve heard that Liberty Mutual considers using someone else’s car more than two times a month regular use. On the other hand, USAA has told me that using someone else’s car up to 90 days is not considered regular use even if the car is kept at an address that the insurance company does not know about. As you can see, some insurance companies are more generous than others.
The purpose of the limitation is to stop a situation in which the members of a family or household have two or more automobiles that are or may be used interchangeably, but each family member insures only one automobile under his or her own policy. Check out State Farm Mutual Automobile Insurance Co. v. Holland, 296 So.2d 100 (Fla. 1st DCA 1974) (That case involved a car registered in insured’s name and owned by insured’s son who lived in insured’s house, and the car was available for insured’s frequent or regular use, and thus was not covered as a “nonowned automobile” under insured’s policy).
In Example #5 below, I use some of the facts of the State Farm v. Holland case mentioned above:
Example #5 (Insured driving car registered in resident relative’s name; and owned by resident relative residing in the same household)
Deborah was injured in an accident in Jacksonville – or any city in Florida – while riding as a guest passenger in a Cadillac car being driven by Ian. The Cadillac is owned by his brother, James. The Cadillac was registered in the name of his father, Joseph. On the day of the crash, Ian and James had exchanged cars. James loaned his Cadillac to Ian and James borrowed Ian’s Pinto in exchange.
Joseph originally owned the Cadillac but gave it to James many months before the wreck. James had covered the car with BI limits of $10,000/$20,000. Joseph owned a Chevrolet with $100,000/$300,000 liability limits. State Farm provided the coverage on both the Cadillac and the Chevrolet.
The Cadillac is not considered a “non-owned” automobile within the policy definition of that term for two reasons: The Cadillac was registered in Joseph’s name, the named insured in the Chevrolet policy; and second, the Cadillac was owned by James who was a relative residing in the same household. It was certainly available for his frequent or regular use. Therefore, Deborah is only entitled to the $10,000 available under the BI limits of the Cadillac.
What Happens if You’re Driving a Friend’s Car and Another Car Causes Your Accident?
Your friend’s car insurance should cover you. In a moment, I will get into specifics. Additionally, you can make a claim for pain, suffering, medical bills and lost wages against the other car’s insurance company.
Some people do not want to make a claim with their friend’s (the car owner) insurance company. They may think that making a claim with their friend’s auto insurance may raise their rates. Often times, this is not true. Moreover, not making a claim with your friend’s insurance is a bad decision for many reasons.
Example of What Happens if You’re Driving a Friend’s Car and Another Car Causes Your Accident
Mike is driving his friend’s (Julie) car. Assume that Mike does not own a car or live with a relative who owns a car. An 18 wheeler truck loses control and crashes into Mike’s car in West Palm Beach, Florida. As a result of the accident, paramedics take Mike to the hospital. Doctors diagnose Mike with a concussion, and a back and neck strain.
Mike should make a claim with Julie’s insurance. This way, Julie’s car insurance company (Progressive) will give Mike personal injury protection (PIP) benefits.
Basically, Progressive would pay the hospital up to $10,000 for Mike’s medical bills. That is a big benefit. Since PIP pays the hospital bills, Mike’s out of pocket medical bills will be lower. When Mike settles his personal injury claim against the truck’s insurance company, Mike will get more money in his pocket.
There is another reason that Mike should make a claim with Julie’s insurance. Julie’s insurance policy will require that he notifies it shortly after an accident. If he doesn’t notify the insurance company of the accident, they can deny coverage for failure to report the claim in time. I’ve seen out of state insurance policies have short reporting periods (even if the accident happens in Florida.)
This can cost Mike valuable PIP and uninsured motorist insurance benefits. For example, let’s say that the the truck’s insurance company goes bankrupt. Maybe it is a risk retention group and is not subject to Florida’s Insurance Guarantee Fund. If this “insurance company” goes broke, Mike may not anyone to pay his claim.
Many Other Situations Involve Driving a Car That You Don’t Own
There are many more cases that involve the nonownership or “Drive Other Cars” Coverage that I did not discuss here. I will hopefully add to this article in the future.
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