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: Sep 22, 2020

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Here's what you need to know...

  • Full coverage isn’t an actual option when you get an insurance quote. To buy a full coverage policy, you need to add at least comprehensive and collision coverage to your policy
  • When you buy physical damage coverage, you can file a first-party claim for damage to your covered auto under your own insurance policy
  • Certain parts of your insurance policy will follow the car and other parts will follow the drivers listed on the declarations page. When it comes to claims for damage to your covered auto, the coverage typically follows the car
  • Your auto insurance has a provision that protects you if you give drivers outside of your home permission to drive your vehicle from time to time. This permissive use provision ensures that your coverage will pay for losses if someone is borrowing your car for a short period of time
  • If the driver lives in your home, co-owns the vehicle, or has regular access to the car, they won’t be covered as a permissive user. When a driver that’s supposed to be rated isn’t listed on the policy, the claim for damage can be denied

Lending your car out to friends or family members can pose some serious risks. Your auto insurance policy will protect you when you’re generous enough to let a friend in need drive your car, but coverage doesn’t extend to just anyone.

It’s your job as the policyholder and the vehicle owner to verify that your decision to be helpful won’t lead you to a claims denial after an accident.

Full coverage auto insurance pays not just claims made by other parties, but claims made by the policyholder for damage to their car.

If you’re carrying full coverage, you know that it comes at a cost. Before you pay full coverage premiums, check to see when your policy will pay and when the insurer has the right to reject your first-party claim.

Enter your zip code above to find auto insurance that fits your budget today!

What is a full coverage auto insurance policy?

Full coverage is a term that’s thrown around a lot by insurance agents and even consumers.

Unfortunately, full coverage is a very broad term. What’s considered full coverage can vary from carrier to carrier. Generally, the term refers to a policy that includes the following coverage options:

  • Bodily Injury Liability
  • Property Damage Liability
  • Comprehensive
  • Collision
  • Uninsured Motorist
  • Medical Payments

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Does insurance follow the car or the driver?

There’s a widespread debate concerning whether insurance follows the car or the driver on a policy.

Some say it’s the car and others say it’s the driver, but both answers are partially correct. Your car insurance will follow the car when you have a physical damage claim and the driver when you have any other type of claim.

Who is covered to drive your vehicle?

There are a few different types of vehicles that meet the covered auto definition under your personal auto policy agreement. A covered auto is defined as a car that’s listed on your declarations page, a temporary substitute, or a newly acquired vehicle.

Just like your policy covers other vehicles, it will cover other drivers as well.

Several different people are covered to drive your vehicle. Some of these people will affect your insurance rates and others won’t.

Here’s a list of some of the drivers who can drive any of the cars that are listed on your personal auto policy:

  • Your spouse as long as they are a household resident
  • Any resident living in the home who is licensed and is listed as a driver on the policy
  • Resident relatives who are licensed to drive and listed on the policy
  • Roommates in the home who have their own insurance
  • Children who live in the home and have their permit
  • Children who are licensed to drive and listed on the policy as a rated driver
  • Drivers with a license who don’t live in the home and have permission to drive the car

What does it mean when your policy says it covers permissive users?

If you were to review your policy booklet, you would see that the policy will pay for the claims that you present when you give someone permission to drive your car. Not just anyone can be classified as a permissive user for coverage.

To prevent policyholders from failing to inform the company of a new risk, the company has criteria that a driver must meet before the claim is covered.

Here are the qualifications that need to be met so that your insurance company will pay for a physical damage claim that you file when someone other than a driver on your policy is driving:

  • The driver must not live in the insured’s household
  • The driver can’t own any stake in the vehicle or have an insurable interest in it
  • The driver must have a valid license to drive in the United States
  • The driver must have an established driving history
  • The driver can’t have regular access to the car that’s being borrowed
  • You don’t have a driver exclusion form on file for the driver
  • The driver isn’t using the car for a car sharing service

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Your Insurance Company Will Pay and Then Attempt to Collect From the Other Driver

Insurance companies don’t cover drivers who borrow your car just to be nice, they cover damage to your car when it’s being operated by a friend because they are protecting your financial interests.

It doesn’t mean that every claim filed will be covered if you don’t have your policy up-to-date.

When you file a claim for damage to your car or for third-party damage, your policy will pay out first to prevent issues and financial loss.

After the payment is made, the company may try to collect from the driver’s insurance. Many times, the driver’s policy won’t pay for your damages but the third-party coverage reimburse the primary insurer.

Do your research before you try to do a friendly deed. If the driver will be covered to drive, you can lend it out. If you’re not happy with the coverage you’re paying for, get quotes today so that you can find better coverage from a better carrier.

Enter your zip code now to compare car insurance rates from the best companies in your area!