What happens if a car is insured but not the driver?

Driving a car that’s insured but as an uninsured driver can lead to complicated legal and financial consequences. Here’s a detailed look at what can happen in this situation.

Overview

• In most states, auto insurance follows the car, not the driver. So if you drive someone else’s insured car, you’re typically covered under their policy.

• But in some cases, their insurance may not cover you fully if you’re not a named insured on the policy. Your own insurance could kick in to fill gaps.

• If you damage the car you’re driving, the owner’s coverage for collision/comprehensive should pay for repairs. But they could come after you legally and financially if you lack insurance.

• Driving uninsured can lead to fines, license/registration suspension, and serious out-of-pocket costs if you cause an accident. It’s illegal in most states.

• The best protection is to have your own insurance policy, even as an occasional driver. Non-owner car insurance is an option for those who borrow vehicles.

Does the car’s insurance cover an uninsured driver?

In most states, including New York, auto insurance follows the vehicle – not just the policyholder.

So if you drive someone else’s insured car, you can be covered by their policy even if you’re not specifically named on it. This applies to liability coverage for damage/injuries you cause others, as well as no-fault personal injury protection (PIP) benefits.

However, there are some caveats:

• The owner must have given you permission to drive the car. If you take a car without permission, the owner’s insurance may not cover you.

• Coverage may be limited. While liability coverage does extend to permissive drivers, it may only provide minimum levels required by the state. If you cause major damages or injuries exceeding those limits, the owner’s insurer may not pay the full amounts.

• The owner’s rates may increase. Most companies consider claims filed by uninsured drivers to be higher risk. So the owner could see increased premiums later on, even if they weren’t driving at the time of the accident.

• You won’t have coverage for injuries to yourself. The owner’s liability insurance only covers harm you cause to others – not medical bills or lost wages for any injuries you sustain.

So while driving an insured car offers some protection, it’s not a complete substitute for having your own insurance policy. Let’s look at why it’s risky to drive uninsured.

Consequences of driving without insurance

Driving without insurance can lead to many legal and financial headaches, including:

• Fines. Most states require drivers to carry at least basic liability coverage. Violators can face fines of hundreds or even thousands of dollars.

• License/registration suspension. In some states, driving uninsured can result in your driver’s license being suspended until you show proof of coverage. You may also have your vehicle registration revoked.

• Out-of-pocket accident costs. If you cause an accident while uninsured, you could be sued personally and held responsible for all damages to the other parties. This includes medical bills, vehicle repairs, lost wages, and other costs which could total tens of thousands of dollars or more.

• No coverage for your own injuries. Without insurance, you’d have to cover your own medical treatment, lost income, and other damages in a crash. Health insurance may cover some bills, but often leaves big out-of-pocket costs.

• No protection from uninsured drivers. Uninsured motorist coverage could protect you if you’re hit by another driver with no insurance. But you can’t access this coverage if you’re uninsured yourself.

Key takeaway: Driving without insurance puts you at huge financial risk while also violating the law in most states. It’s best to have your own policy, even as an occasional driver.

What if an uninsured driver damages or crashes the car?

If you drive someone else’s car without insurance and are involved in an accident, things can get complicated:

• Damages to the owner’s car should be covered under their collision and comprehensive insurance (if they have these optional coverages). But they would need to file a claim on their own policy which could increase their rates.

• Injuries/damages caused to others in the accident would be covered by the owner’s liability insurance. But as noted above, the owner could face rate hikes and coverage limits may apply.

• Injuries to you as the driver would not be covered by the owner’s policy. You’d have to try covering bills through your own health insurance or out-of-pocket.

• Legal action from the owner. Even if the owner’s insurance pays for damage to their car, they could take legal action against you personally to recoup costs if they feel you’re responsible for the accident. This could include small claims court or a civil lawsuit.

The result: While the owner’s insurance should pay for some accident-related costs, you as the uninsured driver are exposed to potentially huge uncovered losses.

Options for occasional or borrowed car drivers

Driving someone else’s insured car occasionally doesn’t make you automatically covered. Here are some options for protection:

• Non-owner car insurance: This covers you when driving vehicles that you don’t own. It provides liability coverage and some policies include uninsured motorist protection.

• Rental car insurance: Rental companies offer extra insurance to cover damage to the rental vehicle. But it’s often expensive, so check if you’re already covered by your own policy first.

• Your own car insurance: Even if you don’t own a car, you may be able to get a policy that will cover you fully when driving another person’s vehicle. Contact insurers to learn your options.

• Discuss coverage with the owner: Have an open talk about insurance protection with anyone who lets you drive their car. Check that you’ll be fully covered in case of an accident.

The bottom line is that you should take steps to insure yourself fully, rather than relying on coverage from the car owner. Non-owner insurance can give you affordable and comprehensive protection.

What happens if you’re at fault in an accident?

If you cause an accident while driving an insured car but are uninsured yourself, here’s what typically takes place:

• The car owner files a claim with their insurer for vehicle damage and any liability for injuries/damages to others. Their rates will likely increase.

• Their insurer will likely come after you legally to recover money paid out for the claim, including legal expenses.

• You’ll be responsible for injuries to any passengers in the insured car, beyond the coverage limits in the owner’s policy.

• If injuries or damages exceed the coverage limits of the owner’s policy, you may be sued or have to pay out of pocket for amounts above those limits.

• You must cover your own medical treatment costs, lost income, etc. if you were injured, with no insurance benefits available.

• You could face fines, license suspension, and other penalties in your state for driving uninsured.

The result is often huge uncovered losses you must pay personally, on top of consequences like license suspension. It highlights why having your own insurance is critical.

How insurance companies handle these situations

When an accident involves an insured vehicle and uninsured driver, here’s how insurance companies tend to respond:

• The owner’s insurer will pay collision claims for damage to the owner’s vehicle, but rates may rise.

• Liability payments for injuries to others will be covered, but again likely with a rate increase down the road.

• Insurers will try to recover money paid out from the uninsured driver through legal action or by demanding reimbursement.

• The uninsured driver’s lack of coverage may limit how much the insurer pays out if damages exceed policy limits.

• Claims paid out on behalf of an uninsured driver tend to be viewed as higher risk, often leading to higher premiums.

The takeaway: While the owner’s policy will provide some coverage, insurers frown heavily on claims involving uninsured drivers. Such claims often lead to legal action and increased rates.

Questions an attorney can answer

Here are some examples of questions to ask an attorney if you drive an insured car but are uninsured yourself and are involved in an accident:

• Am I fully covered for liability and damages under the car owner’s policy?

• Could I be sued or held personally responsible for any accident costs not covered by the owner’s insurer?

• Am I at risk of fines or license suspension in this situation?

• What are my options for recovering medical costs and lost wages for injuries I sustain?

• Could the owner’s insurance refuse to cover me or limit what they’ll pay out?

• What legal protections do I have if the insurer denies my claim or pays only part of what I owe?

An experienced attorney can help you understand your financial exposure, rights, and options for recovering costs after an accident as an uninsured driver.

Key takeaways

• Driving an insured car without your own insurance provides limited protection and huge risks if an accident occurs.

• You could be sued, fined, and held personally responsible for extensive uncovered losses.

• The best option is to get non-owner car insurance