How does auto insurance work when you “loan” your car to another?
Monday, December 15th, 2008 at
8:11 pm
Irv S asked:
I have been thinking of “loaning” my car (which I own) to my 87 year old father. I would then lease a vehicle for myself. Then at the end of the lease period (let’s say 3 years) if he is no longer driving, the car returns to me. Can he purchase auto insurance on himself and the car or does it fall upon me and my policy? My father has an excellent driving record and so do I.
I have been thinking of “loaning” my car (which I own) to my 87 year old father. I would then lease a vehicle for myself. Then at the end of the lease period (let’s say 3 years) if he is no longer driving, the car returns to me. Can he purchase auto insurance on himself and the car or does it fall upon me and my policy? My father has an excellent driving record and so do I.
Tagged with: 3 Years • Insurance • Insurance Work
Filed under: Car Insurance
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He would need to get his own insurance for the car, or to be added onto your policy as a driver.
Either one would work, but it might be cheaper (and easier) to add him to your existing policy.
Your coverage (in most cases) would not pay for any damage done to or done by the car while Dad is driving.
Depends on the insurance company. Some policies like mine (State Farm) cover the car no matter who drives it as long as you voluntarily give them the car (in other words, it wasn’t stolen.) Other insurance companies will only insure the car if you are the driver, many will even exclude other members in your household. If you recall them asking you to identify other household members and you named your father when you first signed up, that is probably what they were doing.
You should be able to determine what applies in your case by reading the policy. If you can’t find it or don’t understand it, call your agent for clarification. Your situation may be further complicated because you may run into problems being considered the “primary” driver of the vehicle, especially if you lease another at the same time so be sure to explain this to your agent.
Call your insurance company to see if you can add him to your policy or if he would be covered under yours. Each state is different so ask them. And GO DAD!! 87 and an excellent driving record, those 2 things don’t usually go together.
he can purchase a policy for himself in the USA.
he needs to be owner or added to policy by owner to be covered.