Getting car insurance is usually an easy decision to make, but it may not be obvious what your policy actually covers. In some cases, an insurer may argue that a certain vehicle does not fit within the definition of a policy, or that a certain type of driver is not covered. These disputes can be very technical and hinge on the specific language of the terms.
In general, the drivers covered under a policy will include the named insured, the spouse of the named insured, and any other relative by blood, marriage, or adoption who is living in the household of the named insured. There is an exception for the spouse of the named insured if they no longer live with the insured, are not named on the policy, and are not driving the vehicle with the permission of the insured. In addition, anyone who is driving a vehicle that is specifically named in the policy is covered, as long as they are using the vehicle with permission. The question of whether an employee is covered when they use an employer’s personal car for business can become complicated, but this may support a claim under the liability insurance of the business.
Different policies take different positions on permissive use, which is when an insured allows someone who is not covered under the policy to use their car. Permissive use can be overt or implied. If a policy does allow claims based on permissive use, it might provide a lesser amount of coverage or require a higher deductible. Some policies do not allow these claims at all, which may affect your decision on whether to allow someone to borrow your car. The person borrowing the car may have their own insurance to cover an accident, but their policy may not cover accidents involving borrowed cars.
Permissive use coverage usually does not extend to using the car for business purposes or allowing an unlicensed driver to use the car. Disputes also can arise when a policyholder allows someone with very little driving experience to use the car. This is because the insurer might have required a higher premium if it had known that this driver would be using the car.
Any vehicle named in the policy is covered, as well as any vehicle being driven by the named insured. Moreover, the policy will cover any additional vehicle owned by the named insured during the policy period and any vehicle that replaces a named vehicle. This may be subject to some restrictions, such as a requirement that the named insured notify the insurer of the additional or replacement vehicle within a certain time. If an insured vehicle is not being used while it is undergoing repairs, or if it has been destroyed, the policy will cover any temporary car that is being used as a replacement, such as a rental car.
Some types of larger vehicles may be covered under the same policy as a standard passenger car, even if they are not specifically listed. These may include SUVs, pickups, and delivery trucks with a certain load capacity. Otherwise, the policy only covers larger vehicles that are specifically identified in the policy, and it probably will not cover larger vehicles used for business purposes. Motorcycles are not covered unless they are specifically identified.