Car owners lending their vehicles face complex insurance coverage rules and potential financial risks, with payouts often contingent on the driver’s authorization and adherence to policy terms.
Auto insurance policies typically cover accidents only if the driver is explicitly named on the policy or meets specific criteria set by the insurer, such as holding a valid driver’s license and being of a minimum age.
Insurers commonly classify young or newly licensed drivers as high-risk. This often results in higher deductibles applying to claims if these drivers are involved in an accident.
Coverage can be outright refused by an insurer if the driver commits serious infractions. These include driving under the influence of alcohol or drugs, operating the vehicle without a valid license, or using it for unauthorized purposes.
Additionally, drivers in a probationary period, usually the first three years of licensing, face stricter legal alcohol limits. This increases their personal liability if caught driving under the influence.
Responsibility for traffic violations typically rests with the individual who was driving at the time. However, the policyholder may be held liable if they cannot definitively prove who was behind the wheel during an infraction.