Does My Auto Insurance Follow Me or the Car?

Mar 23, 2021 | Personal Insurance

It has been years but drivers are still somehow confused when it comes to auto insurance in Denver, Colorado or any other state, for that matter. Of course, it is understandable that people may not know about how it works. That’s why we are here for you! Let’s clarify the notion about this topic. Today, we will answer the question “Does my auto insurance follow me or the car?”

Some people say that they are the ones insured, not their car. On the other hand, some people believe that it is their vehicle that is protected. Both groups have their good points. However, they are a bit mistaken. Auto insurance can follow both the car and the driver. Do you want to know why? Keep reading to find out!

What is auto insurance?

Auto insurance is coverage that protects a policyholder from possible legal and financial problems. It can also protect you in a variety of situations. Supposed that you get into an accident, then you’ve got someone to turn to for help. Is there any need for me to get auto insurance if I don’t want to?

Aside from a few, most states mandate their drivers to carry auto insurance. There is a minimum amount of coverage that they are required to carry. This requirement varies from state to state. Kindly keep in your mind that driving uninsured or having no auto insurance is illegal. In case a traffic officer asked you to pull over, you may face jail time and pay legal fines.

There are many types of coverage that you can include in your auto policy. A basic policy mainly consists of liability, collision, comprehensive, personal injury protection, uninsured/underinsured motorist insurance. As you read further, we will give you an explanation of these coverages and how they work. 

Car insurance that protects the driver

Some of you might be confused. That’s why we will categorize the types of coverage into two: the ones that protect the driver, and the ones that protect the car. Let’s talk about the first one. There are types of car insurance that protect the drivers themselves. 

Liability insurance

Liability insurance is mandatory coverage that every driver needs to have. Some states may not require the same thing, but it’s a fact that most of them do. It is a kind of auto insurance that pays for the repairs and medical expenses of the other party in case you hit them. Take note that they will pay for them only, not for you.

Will it pay for any accident that I get into? It will only pay when you are at fault for the accident. If you caused one, then you naturally have to pay for them. With liability coverage, the money that you should be paying will be paid for. It protects you from possibly paying a humongous amount of money. 

There are two kinds of auto liability coverage. We’ve said that it pays for damage repairs and medical expenses. These two types correspond to exactly that. The two kinds are bodily injury liability and property damage liability insurance.

Bodily injury liability coverage

Let’s say, for example, that you hit someone’s car. It caused them to have wounds and bruises. Worse, they have to recover for a long time because the injuries that they sustained are quite severe. This coverage will pay for the bills of the medical expenses that they may make due to the accident. 

Property damage liability coverage

Using the same scenario above, supposed that the car got wrecked and needs to be repaired. For any kinds of repairs needed, your liability coverage for property damage will pay for them. For example, the car repairs amounted to 5,000 dollars. Your liability insurance will pay for that same amount. 

Does my liability insurance have to pay for all the other party’s expenses?

You might be wondering if all the fees that the other party needs would be handled by your auto liability. In that case, there is a chance that you can recover your losses. This falls under the thing that we call negligence.

Negligence happens when you have some fault for the accident to occur. Let’s say that you are speeding down the road and you didn’t notice a car that’s making a left turn. Both of your cars then BOOMED! According to the investigation, it is clear that you are the one who has been negligent. Therefore, you are the one who should be liable.

Comparative negligence

There are two kinds of negligence: comparative and negligence. Comparative negligence allocates the fault between the two parties. For instance, the one who you hit made a claim on your insurance company and even sued you. It is found out that what they said is true. However, it isn’t the end for you. You can reason that they have been negligent too.

Following the previous example, you can say that they are making an illegal left turn. That gives you a chance to not pay for everything. The one with authority may allocate 70 percent of the fault to you. The other thirty percent is allocated to the other driver. 

Comparative negligence can be further classified into two:

  • Pure comparative negligence. The accident victims may receive compensation no matter how high their negligence is. Even if theirs is higher than the at-fault one, they can still recoup some of their losses.
  • Modified comparative negligence. In this one, there is a cap on the allocation of fault. If their fault exceeds a certain threshold, the accident victim may not get any compensation at all. For example, the threshold in Denver, CO is below 50 percent. If their negligence equals or exceeds that, then your liability insurance may not pay for them at all.

Contributory negligence

Another type of negligence is contributory. This one is quite brutal in its league. That’s because any percent of negligence renders an accident victim to receive no reimbursements at all. For example, the one that you hit is 3 percent negligent. Your liability coverage may not be responsible for their damages. 

Coverage limits

The minimum amount of liability insurance that you need differs according to the state’s laws. Auto insurance laws in Denver, Colorado require you to carry at least 25,000 dollars per person for bodily injury. Bodily injury per accident requires 50,000 dollars. As for property damage per accident, you need to carry 15,000 dollars.

Of course, these amounts are the bare minimum. However, keep in mind that you can never tell how severe an accident would be. In general, these amounts might be insufficient. The amount that you should get would only be right if it can possibly cover a lot of damages. The more coverage that you have, the better it is.

Personal injury protection and medical payments coverage

Personal injury protection (PIP) pays for the medical expenses that an insured driver or their passengers might receive due to an accident. It is also known as no-fault insurance. The best part of this is that it pays regardless of who caused the mishap. It also pays for other kinds of losses such as:

  • Bills related to medical care
  • Deductibles for health insurance
  • Possible lost income due to injuries
  • Childcare and house cleaning
  • Funeral costs

Kindly take note that this isn’t available in all states. On the other hand, some states may require it. Regardless, it will be a worth-it option to spend your money on auto insurance. Just remember that it will only pay for medical-related expenses. It will not reimburse you for any car repairs and property damages.

Another kind of insurance is medical payments coverage or simply med pay. Same with PIP, it reimburses you for the fees regarding medical care. The downside though is that it won’t cover your lost wages and living expenses during the time that you’re injured.

Uninsured/underinsured motorist coverage

Statistics say that there is at least one (1) out of eight (8) drivers on the road uninsured. For every eight cars that you may encounter, there’s a chance that you get into an accident with one who doesn’t have insurance. Uninsured/underinsured motorist coverage covers that situation. It pays if the one who hit you is uninsured. 

Uninsured motorist bodily injury (UMBI)

Just like how we are responsible for paying someone’s medical bills if we caused an accident, it’s also the same for us. If someone hit you and caused you to get injuries, then they are supposed to pay for your bills. The problem is that the one who hit you doesn’t have the money to pay for it.

That’s what UMBI reimburses you for. It will pay for your medical bills, as well as pain and suffering. This also applies when you are hit as a pedestrian. In fact, if you are a victim of a hit-and-run, it will kick in.

Uninsured motorist property damage (UMPD)

For car damages, UMPD is the one that pays for it if the other driver is uninsured. It will pay for the repair costs that you need. It may pay for the repairs of other kinds of properties. This is especially essential considering the risk of an uninsured driver suddenly hitting your car.

Underinsured motorist insurance (UIM)

Most drivers are insured. The problem is that some only get the minimum amount required by their state. That’s when a problem may occur. In some situations, the at-fault driver doesn’t have enough insurance. Underinsured motorist insurance kicks in if that happens.

Why does my UIM have to pay when I’m not the one who caused it? Simple. If it doesn’t pay, then you will be the one who will pay for everything out-of-pocket. Kindly remember that insurance protects you from facing financial problems. That’s the goal of this coverage.

Non-owner auto insurance

Another type of car insurance is non-owner insurance. This is coverage that protects you if you drive but you don’t own a car. This one is most suitable for drivers who always borrow a friend’s car or someone else’s car. What does it cover?

Same with liability coverage, it covers bodily injury and property damage. Take note that it doesn’t cover your own expenses for the repairs and medical care that you might need. Nonetheless, it acts as a back-up in case you hit another vehicle. One more thing to consider is that it is less expensive than a standard auto policy in general.

What does it cover aside from liability coverage?

  • Medical payments (med pay)
  • Personal injury protection (PIP)
  • Uninsured/underinsured motorist insurance (UM/UIM)
  • Rental car liability coverage

You might ask if you can get auto insurance coverage without a car. YES! Non-owner auto insurance is precisely for you! You should consider getting covered with this if you use a car-sharing service frequently. Another reason is if you rent a car a lot of times. Instead of buying liability coverage from the rental car company every time, it might be less costly to have non-owner insurance.

Auto insurance that protects the vehicle

Since we are talking about car insurance, it means that it’s not only the driver that is covered. There are types of insurance that insures the vehicle. Kindly take note that whatever injury you have, these types won’t pay. The only thing that these types cover is your car. If there are any damages made to your car, then they will reimburse you!

Collision coverage

Accidents happen all the time. You might not expect to get involved in one, but who knows? A little negligence on your part might result in a collision. Having a back-up to help you pay for vehicle repairs is a must-do. This back-up is exactly collision insurance. This will pay if your car is damaged in a collision, no matter who is at fault.

For instance, your car swerved because your mind was preoccupied with something. The end result was a crash. If you are found to be at fault, then your liability insurance will pay for the other driver’s repair fees and medical costs. However, who will pay for your repairs? That’s the role of collision coverage.

Comprehensive coverage

Sure, there is a type of coverage that will pay for your car damages due to a collision. Is there one too for other kinds of situations? Comprehensive insurance is at your service. The word comprehensive implies that this coverage covers a lot of kinds of damages. Take note that it won’t cover for collision damages though.

Comprehensive coverage will pay if:

  • A tree or tree limb fell on your car
  • A deer hit your vehicle
  • It is damaged by vandalism
  • Stolen
  • Weather damages

What happens if my friend or someone else drives my car and gets into an accident?

It is common for us to lend our cars to our close friends or family. It may be because of the long drive and you let them take over. Whatever the reason, sharing and letting someone else drive your vehicle isn’t unusual. The problem now is if they get into an accident while using your car. Whose insurance will pay for whom?

In general, those who are listed in your insurance policy are covered. For example, your wife, your children, your siblings, and other family members are included in your policy. If they drive your car and suffer from a mishap, then you can rest assured that they will be covered. Those who are not included might or might not be covered depending on some factors.

Paid car-sharing

If you are renting your car to a car-sharing company, then they may not be covered. Your auto insurance will not extend to those drivers who rent your car. In most cases, you might need to ask your insurance provider about a specific kind of coverage for that.

Excluded drivers

You can name some people specifically excluded from your insurance policy. In case they are driving your car, then they will not be covered. Most states allow excluding drivers from your auto policy except for a few. In fact, insurers may make you exclude drivers who had been in several accidents.

Commercial use

Your policy will not cover accidents while you are using your car for commercial use. These include delivering food, driving for a transportation network company, and the like. You may want to ask an insurance agent to give you better information about separate coverage for this type of use.

Permissive use

Your insurance being liable may depend on permission. Even if they’re not included in your policy, handing them the keys and giving verbal permission works just the same. Kindly take note that their coverage will be reduced, however. Unless you exclude them from your policy, you will have to use your auto insurance.

What happens if my car is uninsured and I lent it to someone with insurance?

If you’ve got no collision and comprehensive insurance carried on your car, then what will happen if you lent it to someone? In case they cause an accident, their liability insurance will pay for the victim’s costs. However, the damages made to your car likely won’t get covered. If their insurance isn’t enough, then you may have to share in the costs.

Does my insurance cover me driving another car?

Just like how your insurance pays for the included names on your policy, it’s the same. If you are included in the owner’s policy, then you may be covered. If you are not listed, then it depends on their permission. It may also depend on the terms and conditions of their auto insurance.

Remember that your liability insurance will still follow you regardless of the car that you are driving. However, your collision and comp coverage might not. It is best to understand your policy thoroughly so that you know the limits and conditions for you to be covered. 

Can you get car insurance without a license?

Yes, you can. You may get insurance to get your family members such as your husband/wife, siblings, children, and others. The problem is that most insurance companies are wary about insuring people without a license. They will usually require to have at least one licensed driver listed on the policy.

Sharing your vehicle

Before sharing your vehicle, there are a few things to remember:

  • Make sure that they are licensed. The license of course has to be valid. You have to make sure that it isn’t expired.
  • Include them in your policy and vice versa. It is best to do this if you will frequently share your car with another driver. This will make both of you insured in case of a mishap.
  • Ask and purchase coverage that will cover you if you will drive the car for commercial use. Doing this can protect you from possible liability and your investment in the vehicle.
  • Clarify and get permission first from the owner if you are borrowing a car.  Obtaining permission is a must. Otherwise, you may find yourself in trouble if you cause an accident.

Does my auto insurance follow me or the car?

We can just say that every situation varies. Your insurance may follow you or your car depending on the language of your policy. Nonetheless, coverage for you and your vehicle gives you peace of mind, knowing that someone got your back. After all, life is full of unknowns. It is for the best to be ready at all times and situations.

Final Say

Auto insurance is coverage that insures you in case of accidents and other situations. Is there a need for it? There are many kinds of accidents, but the ones involving cars are the most damaging. It might change your life financially, and physically. Imagine getting into one without insurance. You might go broke just to pay off the costs and even suffer from legal consequences.

We, at Advantage Insurance Solutions, got you! Get a quote from us today and you can rest assured that we are here for you in times of need. An excellent team gives excellent service. That’s what we give our customers with the best of our efforts. Call us now!