Car accidents are more common than you think. With over 6 million car accidents every year in the US, and the numbers still rising, every driver will be in a car accident at some point in their lives. This is what makes having auto insurance, both liability coverage and personal auto insurance so important. Accidents are dangerous, but they are also very expensive. Paying for the repairs and medical treatments from your pocket would be a financial disaster.
But then what happens if your car crash is caused by someone with no auto insurance? What if someone is driving your car and they crashed it? Or what if the other driver who crashed into your car has no auto insurance policy? This article will answer in detail everything you need to know about such situations.
Basics of Auto Insurance
When you buy an auto insurance policy, you are not just insuring your car, but the company looks at the policyholder as well. Insurance companies take in a lot of factors that affect the chances of you getting in a car accident and making a claim. It considers your driving record, past traffic violations, age, credit score, gender, etc.
Insurable Interest
For a question like the one in this article, it is important to understand what insurable interest is. To the insurance company, a car that you own is your insurable interest. Since you have paid for it, and it is registered to your name, you have higher stakes in the safety of the car.
This is why you cannot get in an insurance policy for a car that you do not own. Since you don’t own it, the insurance company thinks you’d not be as enthusiastic or careful in protecting the car from theft or accidents.
Types of Coverage
Liability insurance coverage is mandatory in 48 states (except Virginia and New Hampshire). This means that you are not allowed to drive a car without a liability coverage policy with the state-mandated minimum limit. This insurance policy is for the other driver in an accident that’s your fault.
Collision coverage is the insurance policy that covers the cost of repairs to your car irrespective of whose fault the accident is. Collision coverage could be very costly and the prices varies from one state to the other. To get the best prices, for example if you live in Texas, look for the cheapest car insurance in Texas and select the policy with the best pricing and best coverage.
The comprehensive insurance coverage covers the cost of repairs for all the damages caused due to natural calamities like fires, earthquakes, hailstorms, etc. It also covers damages due to vandalism, riots, and theft.
Personal Injury protection is mandatory in 12 states and this policy is used to cover the cost of medical treatments.
An uninsured/Underinsured motorist coverage policy is used when the other at-fault driver either does not have liability coverage or has liability coverage but with an insufficient minimum coverage limit.
What if Your Friend Crashes Your Car
Most insurance companies will cover the cost of repairs if your friend crashes your car. Note that your insurance policy will be used during the claim. Since auto insurance policies cover the vehicle and not the driver, if you have liability insurance coverage and collision coverage, you are most probably covered.
The insurance company will pay for the repairs and medical treatments of the other driver (liability coverage) and the repairs of your car (collision coverage). If you don’t have a collision coverage policy, then you’re on your own to fix your car.
The reason we mentioned “probably” is because while most auto insurance policies are claimable if someone else crashes your car, some policies might not. Many low-cost auto insurance policies only cover the policyholder. This means that only if the policyholder crashes the car, the insurance amount is claimable. These policies also exclude family members.
So if you want to know whether your car insurance policy covers someone else crashing your car, contact your insurance agent and get the details. If your friend or someone in your family regularly drives your car, it would be better and safer to add them as registered drivers in your insurance policy.
A Road Accident with Someone without Liability Coverage
Even though it is illegal to drive a car without liability insurance coverage, many drivers in the US do not have a liability insurance policy. So what happens if you get in a car accident with a driver who does not have a liability policy?
Well, the first thing would be suing the other driver. This is the only way you can make the driver at fault. The court can order the driver at fault to pay a lump sum or pay in small chunks from his/her paycheck. But suing is a long and tedious process. What about the money that’s needed to fix your car and pay for the medical bills?
To avoid such cases, you need to get either one or both of these auto insurance policies: Uninsured motorists policy and Personal Injury Protection plan. Here’s how it works:
If you get in an accident and the driver at fault does not have liability coverage or has liability coverage but with an insufficient minimum coverage limit, you can claim your uninsured motorist coverage policy. It will pay for the cost of repairs and medical treatments.
The other important insurance policy to have is a personal injury protection plan. In 12 states, called “no-fault” states, it is mandatory to have this policy. Irrespective of whose fault the accident was, this insurance policy can be claimed to pay for the medical bills.
If you don’t have a liability insurance policy and get in an accident, well the same could happen to you. You’ll be sued, you’ll have to pay hundreds of thousands of dollars, have your driving license suspended, and probably some jail time as well. So don’t drive uninsured.
