Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Aug 9, 2021

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Here's what you need to know...

  • Your auto insurance policy has special provisions that give you coverage when you’re driving vehicles that you don’t own
  • In some cases, non-owned vehicles will receive the same level of protection that your listed autos receive
  • Liability insurance will follow the driver when they are operating rented, and borrowed vehicles but the vehicle’s primary policy will pay first
  • The exception would be if you’re driving a rental car. As long as you have regular car insurance in the US, it will generally cover rental cars
  • If the vehicle that you’re driving is considered a temporary substitute to your vehicle, your physical damage coverage may extend to the other car while you are behind the wheel
  • Be sure to check and see if the vehicle owner’s insurance policy will cover you as a permissive user before you drive a car that you don’t own

Imagine going into a car rental shop. They’ll generally offer you insurance that allows you just walk away if you’re in an accident. Of course, they charge you a certain amount every day, which adds up quickly. But do you need to buy these types of coverage? What about if you’re borrowing a car from a friend or family member? Do you need your own insurance?

Luckily, your auto insurance policy has special provisions written into it that offer you more protection than you might know. Generally speaking, a car insurance policy will cover a “trusted driver” using a car on a limited basis. Liability and other coverage generally follows the car. The main exception is if you’re driving a rental car. Then your coverage would follow you.

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How does a personal auto policy define a covered auto?


A Personal Auto Policy is a contract. Since the contract is legally binding, insurance companies invest a lot of money to be as specific as possible when drafting the terms, conditions, and definitions that you find in your policy booklet.

In the contract, there’s a section that’s dedicated to defining some of the broad terms that are used throughout the document. While you might assume that a covered auto is defined as a vehicle that you own and have listed on the policy, that’s not the case.

The definition is much broader than you’d think. Here are cars that are covered:

  • Owned autos that you acquire after the policy begins
  • Trailers that you own with a load capacity of 2,000 pounds or less
  • Autos that you use as a temporary substitute with the permission of the car’s owner

Your car would also be covered under most policies if you allowed a trusted driver to drive it.

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What is a temporary substitute vehicle?

Not only do you need to know the definition of a covered auto, but you also need to know the definition of temporary substitute auto to understand fully how your coverage will extend in certain situations with your insurance company.

Here are scenarios where the car that you don’t own will meet the substitution definition:

  • Your car has broken down
  • Your car is being repaired
  • Your car is being serviced
  • Your car has suffered a loss
  • Your car has been totaled in an accident

How does coverage extend when you are driving a car that you don’t own?


Does car insurance follow the driver or does it follow the car? This question is one of the most popular ones asked today. Unfortunately, saying that insurance follows only the car, or only the driver is inaccurate.

Whether or not the insurance will follow you as a driver depends on the situation. That’s why it’s important that you understand that different rules apply in different situations.

How Does Liability Insurance Function When Borrowing A Car?

A basic auto insurance policy includes liability coverage that pays for third-party damages.

The coverage provides you with asset and income protection if you’re ever in an accident, and you cause injuries or damage. It also helps to cover the cost of legal defense if you’re taken to court after an accident.

When you have your own standard policy, the liability benefits on the policy will follow the car and also the drivers on the policy. This could mean your liability coverage would cover injured parties if your car was involved, but you were not.

Whatever liability coverage you carry will follow you when renting a vehicle or borrowing a friend’s car.

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How does the owner’s car insurance protect you when you’re borrowing a car?


Your liability coverage will cover third-party damages while you’re in a vehicle that you don’t own, but the coverage from your policy is secondary to the car’s actual insurance policy.

The owner’s insurance will pay out first, and then your policy will pay after those limits are exhausted.

How does your liability coverage work when you lend your car to someone?

When you’re letting someone borrow your car, and they aren’t listed on your policy, it’s nice to know that your liability coverage might still pay for third-party damages when that person gets into an accident.

As long as the driver qualifies for permissive user status under your policy, the policy will pay to repair property or to cover medical bills.

Keep in mind, any driver driving your car should be legally licensed. If you allow an unlicensed driver to drive your car, even for a short time, your insurance company could refuse to pay out on comprehensive coverage, collision, etc. If you’re letting someone borrow your car, it doesn’t hurt to double check.

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Who qualifies for permissive user status?

Giving permission to someone isn’t all you have to do to ensure that they will be covered to drive a vehicle without being a listed driver. If you have specific questions, don’t be afraid to call or email your insurance company or insurance agent. They can make sure you’re on the right track to protect yourself and avoid serious liability or hikes in your insurance rates later on.

To have peace of mind, you need to be sure that the insurer considers the driver a permissive user. In any of the following situations the driver won’t qualify as a permissive user:

  • The driver can’t live in the household
  • The driver can’t own the vehicle or have any insurable interest in it
  • The driver must be over the age of 25
  • The driver must have a valid driver’s license
  • The driver can’t have serious moving violations
  • The driver can’t be a child of the vehicle’s owner

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Physical Damage Coverage Has Serious Restrictions

There aren’t many restrictions when it comes to liability coverage, but your physical damage protection won’t follow you to protect just any car. This is where the definition of temporary substitute vehicle becomes important.

For your comprehensive and collision coverage to pay for damage claims, the car needs to be a substitute for a car that you own and don’t have access to.

Comprehensive and collision typically follows the insurer car, but there are a few cases where your collision coverage will extend to rented cars or a borrowed car that you have access to strictly because your car is broken down or in the process of getting repaired.

If collision coverage does extend, your same deductible will apply.

How does your medical payments coverage extend?


Medical payments coverage is a form of no-fault protection that pays for your medical bills when you’re in any vehicular accident.

If you’re out driving a rented or borrowed car, your medical payments coverage will act much like liability coverage. It will follow you to ensure that you have coverage when you’re driving a car or walking.

Sub-Standard Policies Might Have Different Provisions

If you have a poor driving record, or you don’t qualify for standard insurance, be sure that you know how the provisions of a sub-standard policy differ from the provisions of a standard policy.

Some named driver policies to provide coverage for only the named drivers on the policy who are driving listed vehicles.

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What if you don’t own your own vehicle?

If you don’t own your own car, that doesn’t mean that you shouldn’t buy auto insurance. Drivers who borrow or rent cars on a regular basis should carry at least some liability coverage.

Specialty non-owners car insurance policies can be beneficial for licensed drivers who frequently drive but who don’t own cars.

If you’re tired of paying too much for a sub-par auto insurance policy, it’s time to start shopping around for affordable coverage. You don’t have to compromise your level of protection just to save money monthly or annually.

Simply enter your personal information into an online rate comparison tool and see how much it costs you to buy coverage through some of the most respected carriers in the industry.

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