Q. I have car insurance for me, my wife, my 20 year old daughter who is in college and my 23 year old daughter who is a college graduate and lives alone away from home. He only drives our cars a few times a year. Do I still need to take out auto insurance for him? Can it be covered by the uninsured motorist clause?
A. The answer is not easy.
The first thing to do is check your policy and discuss coverage with your agent. We understand that you don’t want to pay for insurance you don’t need, but you don’t want to find yourself underinsured if something were to happen when your son uses your car.
Most car insurance policies have a “permissive driver clause,” said Loretta Worters of the Insurance Information Institute.
She said the clause means the car owner can occasionally lend their vehicle to a friend or family member, and their insurance will still cover potential damage under the car insurance policy.
However, she says, it also depends on your insurer and your particular policy.
For example, coverage rules and regulations may be different if the driver lives in your household and could or should be listed as a named insured on your policy, but is not; or if the driver is listed on your policy as “excluded”.
“Generally, even if the person driving your car has their own insurance, your insurance will be the primary payer for damages caused by your vehicle, but the person driving your car must be legally convicted before your insurance will pay. ,” Worters said. “Driver’s insurance is secondary and may cover certain bodily injury or medical expenses. It may also provide coverage beyond your insurance coverage, if the cost of damage to your vehicle exceeds the policy limits.
Coverage for uninsured motorists is a very different thing, she said.
It’s coverage you buy in case you have an accident with someone who doesn’t have auto insurance coverage, she said, noting that it’s illegal to drive without insurance.
Before lending your car to someone, whether it’s a child or a friend, she recommends that you follow these steps.
First, make sure the borrower is licensed to drive? Make sure their license is up to date and ask to see it before handing over the keys.
Next, ask yourself if the person has a clean driving record.
“If this person has been involved in multiple accidents, they may also damage your car,” she said.
Then make sure your insurance is up to date and consider increasing liability coverage before letting someone borrow your car.
Finally, write down why they plan to use your car.
“If it’s for a commercial activity like a ride-sharing program and you only have personal auto coverage, you might not have coverage,” she said.
Also note that for your student, your insurance company may offer discounts if the child lives within a certain number of miles from home.
Send your questions to Ask@NJMoneyHelp.com.
Karin Price Mueller writes the Bamboos column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. To find NJMoneyHelp on Facebook. Register for NJMoneyHelp.comit is weekly e-newsletter.