While the details of auto insurance policies differ from state to state, generally, auto insurance provides compensation for bodily injury and property damage. The at-fault driver’s insurance policy is responsible for paying out these financial damages to the party not at fault. However, it is important to clear one common misconception up front — it is vehicles, not drivers, which are insured.

That means if you loan your car to a family member or friend, and they are responsible for a car accident while driving it, it is your insurance policy that will ultimately be footing the bill.

Permitted vs. Excluded Drivers

Depending on your insurance coverage and the state which you reside in, your insurance may or may not cover damages resulting from a car accident. There are two categories of drivers:


Permitted driver driving someone else's carIf you let somebody drive your car, you are making them a permitted driver for your vehicle. When a permitted driver is responsible for an accident, your insurance is still stuck with the damages. This is because your insurance is the primary insurance covering the permitted driver in the accident. By default, your partner or other members of your household are permitted drivers on most policies.


While not applicable in all states, most states allow you to intentionally exclude drivers from your policy. So unless you have specifically removed a family member from your insurance coverage, you will most likely be responsible in the event that they are in an accident. However, if an excluded driver borrows your vehicle and causes an accident, your insurance will not be involved, even if you gave them permission to drive the car.

Can I Still Be Liable For Damages?

When you give someone permission to drive your vehicle, you are making them a permitted driver. This means that your auto insurance policy becomes the primary insurance policy for that driver. If the permitted driver gets in an accident, that means their primary insurance (i.e., your insurance) is liable for the damages. Damages can include:

  • Damages to your own vehicle
  • Damages to other vehicles or property
  • Medical bills for injuries, in some cases

Girl who has been involved in a car accidentIn some cases where the damages from the accident are so severe that they exceed the limits on your insurance policy, occasionally the permitted driver will be required to help cover the costs by involving their own insurance. If they do not have an insurance policy, then they may be held personally liable for the outstanding financial damages.

You are also not liable for damages if a friend or family member takes your car without your knowledge or permission, even if they are a permitted driver, but this is often very difficult to prove.

Is My Insurance Affected Even If I Wasn’t Driving?

Generally, it doesn’t matter if you are in the car or not when the accident happens; all that matters is that your vehicle was involved in the accident. A permitted driver causing an accident in your vehicle is essentially the same as you getting in an accident from the insurance company’s perspective.

So, just like if you caused an accident, if a friend or family member driving your car causes an accident, it means your insurance premiums are most likely going to go up. It’s a good idea to contact your insurance agency immediately and talk in detail about your policy with an insurance agent. Some policies offer accident forgiveness plans that can safeguard your premiums and prevent them from rising in the aftermath of an accident.

Man hurt in a car accident who needs to file a car accident settlementIn serious cases where the fault of the accident is contested or where bodily injury claims are involved, then you should also immediately seek legal counsel to explore your options after a car accident. Personal injury attorneys can help you to understand your liability risk, recover damages, and fight for your legal rights.

Call Parnall & Adams To File A Car Accident Settlement

Speak to the car accident attorneys at Parnall & Adams Law in Albuquerque, New Mexico, to learn more about what to do if you have been involved in an auto accident. They are highly experienced civil litigators who have directly handled all types of road accident cases, including car and truck accidents, motorcycle accidents, and SUV rollovers.

Parnall & Adams will help you optimize the value of your claim by offering exceptional legal advice and counseling. They are highly knowledgeable about New Mexico’s tort laws and will thoroughly explain to you how these laws apply to your case. The first consultation is free, and they offer a 24-hour voicemail. They will also return your calls on the same day they were received. Among the most common types of damages they help clients recover are medical expenses, permanent injury or impairment, pain and suffering, loss of enjoyment of life, loss of household services, and punitive damages.

In extreme cases, Parnall & Adams will also help you get compensation for loss of work and rehabilitation costs. Call Parnall & Adams Law today at 505.886.4446 or request a consultation online.