Parents often allow their children to drive the family car. In most cases, the child is covered under the parent's auto insurance policy if an accident occurred. Some insurance policies only provide coverage for the named-insured and exclude coverage for additional drivers. In this case, a child must obtain their own insurance policy to drive a parent's vehicle.
In some cases, a parent may not want to add the child to their insurance policy. If this is the case, the child can obtain a non-owners insurance policy. This type of policy provides liability and uninsured motorist protection for the policyholder while operating a non-owned vehicle. It is important to note that non-owners policy only refers to adults above 18. Children younger than 18 cannot legally enter into an insurance contract.
Most auto policies provide insurance coverage for the owner of the vehicle as well as people who regularly operate the vehicle. Owner-operator insurance policies are the most common types of policies because most people insure the vehicles they own and drive. Insurance coverage extends to drivers who operate the vehicle with the owner's permission. If a child takes a parent's car without their consent, legally they are operating the vehicle uninsured unless they have their own insurance policy in place to cover non-owned vehicles.
Depending on the insurance company, additional drivers may or may not have to be listed on the insurance policy. Most carriers want to know who will operate the vehicles they insure. If a particular driver will operate an insured vehicle on a regular basis, the insurance company will want to gather information regarding that person's driving history so they can be added to the policy and charged an additional premium. Failure for a policyholder to add an additional driver could result in a claim denial if the driver is involved in an accident.
If a driver operating a non-owned vehicle is involved in accident, the claim must be handled a certain way. If both the driver and the car owner have insurance, the owner's insurance pays primary and the driver's insurance pays secondary. In other words, once the vehicle owner's insurance limits are exhausted, the driver's insurance policy will pay the remainder of the damages. In cases where the car owner's policy covers all expenses, the owner can sue the driver's insurance policy to recover money paid out for the accident.