Car Insurance: What Drivers and Vehicles are Covered?

After most car accidents, figuring out who's got car insurance isn't a problem. The other driver has liability insurance, you have your own coverage, and that's all you need to know. Sometimes, though, there can be insurance problems. Most coverage disputes involve questions about whether a driver or vehicle is excluded from liability insurance coverage. Here's a quick guide to common auto liability insurance inclusions and exclusions.

(Learn more about different types of car insurance coverage.)

What Drivers Are Covered?

Most liability coverage insures both people who are named in the policy and a few others who might not be named. Let's take a closer look at the drivers likely to be covered.

The Named Insured

The named insured is the person or people named as insured in the policy. As a rule, liability policies cover named insureds no matter what car they're driving.

The Spouse of a Named Insured

Liability insurance almost always covers the spouse of a named insured. Coverage exists while the spouse is driving most cars, even if the spouse isn't named as an insured under the policy.

If the couple no longer lives together, coverage for the spouse can be an issue. To be covered in this situation, the spouse usually must be a "permissive user." As the name suggests, a permissive user is someone who's driving a covered vehicle with the owner's permission. But beware: In some states, insurers provide only reduced coverage (or charge higher deductibles) for an accident caused by a permissive user.

Other Relatives

Any licensed driver living in the same household with a named insured, and who is related to the named insured by blood, marriage, or adoption (usually including a legal ward or foster child), typically is covered while driving most cars.

Anyone Driving an Insured Vehicle

Any permissive user (see above) of an insured vehicle is covered. Here again, the key to coverage is that the person must be using the vehicle with the owner's permission. So, for example, a thief who steals an insured car isn't covered because they're not using the car with the owner's permission.

It's often easy to figure out if a driver has permission to use a vehicle. But difficult situations can arise. Suppose one teenager lets another teen drive a parent's car without getting the parent owner's permission. The insurance company is likely to argue that the second teen wasn't a permissive user and deny coverage for the second teen driver.

(Learn more about when you're liable for someone else's driving.)

Employees and Business Users

Most personal auto liability policies exclude coverage for business uses of a vehicle, including use by a vehicle owner's employees. The business should have its own auto liability coverage. If so, a person injured by a business user can file a claim for compensation against the business's coverage.

What Vehicles Are Covered?

Most auto liability policies cover a variety of vehicles, even if they're not specifically named in the policy. Here are some of the vehicles that commonly are covered.

Named Vehicles

Any vehicle named in the liability coverage declaration is covered. As a rule, an accident in a vehicle not named in the declaration is covered only if a named insured (see above) was driving.

Replacement or Added Vehicles

Any vehicle that replaces the originally named vehicle, and any additional vehicle the named insured owns during the policy period, is also covered. However, most policies require that the named insured notify the insurance company of the replacement or added vehicle within a fairly short time period—like within 30 days after it's acquired.

Temporary Vehicles

Liability overage usually extends to any non-owned auto used as a temporary replacement for an insured vehicle that's out of service because it needs repair or has been destroyed. Suppose, for instance, that you take your car to the dealer for mechanical work, and the dealer provides you with a temporary loaner car. Under most policies, your liability coverage insures the loaner.

Rental cars are another common example of a temporary vehicle likely to be covered by your liability policy. (Learn more about whether you might want additional insurance protection when you rent a car.)

Utility Vehicles

Most liability policies cover an insured person driving a vehicle larger than a normal passenger car, but only up to a limit. Coverage typically extends to sport utility vehicles, pickups, flatbeds, and delivery or panel trucks up to a rated load capacity stated in the policy.

Larger vehicles might be covered if they're specifically listed in the owner's auto policy. Note, importantly, that personal auto policies almost always exclude utility vehicles used for business or commercial purposes.

Finally, the same holds true for a motorcycle: To be covered, it must be specifically named in the policy.

Get Help With Your Car Insurance Coverage Questions

Insurance policies are notoriously complicated, difficult to understand, and hard to apply to real-life facts. Don't feel bad if you have coverage questions you can't figure out on your own. There are places you can go to get help. For example, you can ask your insurance agent if you're not sure about coverage or coverage limits.

If you still need more help, contact an attorney who specializes in working with insurance policies. An experienced personal injury lawyer regularly works with auto liability policies and can help you sort out your coverage questions. Here's how to find a lawyer in your area.