Because Texas is a fault state, all drivers must carry liability insurance. This means if you’re in a car accident, you can claim the cost of your medical treatment and other losses from the at-fault driver.
But what happens if you’re in an accident and the car is insured, but the driver is not on the insurance policy? This might happen if an insured driver lets a friend borrow their car or even if the vehicle has been stolen.
Does insurance follow the car or the driver in Texas?
When the driver involved in the accident isn’t on the car’s policy, it can make insurance claims complicated. Insurance companies are in the business of making it as difficult as possible for people to make a claim — after all, if they have to pay out a huge sum, they’re losing money. Even in a cut-and-dry case where an insured driver is on the policy and at fault, it can be difficult to get the payout you’re entitled to. When a driver is not listed on the insurance policy, the insurer may dispute liability (or fault) because the person involved isn’t covered.
We look at what happens if the driver is not listed on the insurance after an accident and explore your options.
Car Insurance and Borrowing a Car: What Does the Policy Cover?
Whether you can claim your expenses from a driver who is not on a policy boils down to one question:
“Does car insurance follow the car or the driver?”
In most cases, car insurance follows the car, which typically means you can claim from that car’s insurance when a driver crashes into you — even if they’re not on the policy.
This has become even more common since named driver auto insurance policies were banned in Texas.
Named driver auto insurance was popular with drivers as it was less expensive than a standard policy. These policies were cheaper because they provided coverage only to “named drivers” — in essence, this type of insurance followed the driver. This meant if the owner of a vehicle had no intention of letting a loved one borrow their car, they could take advantage of a cheaper policy by listing only themselves.
However, if a driver who wasn’t listed crashed into you and the owner had a named driver insurance policy, your chances of recovering damages from the insurance company were slim. Even if the person driving the vehicle were a relative or loved one who lived in the same household as the policyholder, the insurance wouldn’t have extended to them unless they were explicitly listed as a named driver.
In January 2020, Texas introduced House Bill 259, which prevented this type of insurance policy from being renewed. Drivers now have to opt for a standard policy, which decreases the chance that an insurance company will refuse to pay out for crashes where a borrowed car is insured, but the driver is not listed on the policy.
However, that doesn’t mean insurance claims will be honored in all cases. Insurance coverage varies between insurers, and the car owner’s policy may or may not extend to drivers who aren’t explicitly listed on the plan.
Driver Is Not Listed on the Insurance: Did They Have Permission from the Vehicle Owner?
Whether you can claim if a car is insured, but the driver is not on the policy also depends on whether permission was given.
Permissive use refers to explicit or implied permission from the insurance policyholder for the driver to operate their vehicle.
This means that if a car owner (and holder of the insurance policy) told their brother they could borrow their car, and that driver then crashed into you, you may still be able to claim from their insurance. However, it’s important to seek legal advice, as not all insurance policies cover permissive use, and if they do, they may only provide limited coverage.
There are exceptions to permissive use policies, such as driving for business purposes. For example, if a driver lets their friend borrow their car to make deliveries because their own car is in a garage and they are responsible for a car crash, the insurance company will likely not cover the accident.
Non-permissive use means the driver of a vehicle hasn’t sought consent from the policyholder before taking the car on the road. If you’re in an accident with a driver who is not listed on the insurance and they have borrowed a car without permission, you can typically still claim.
If the driver is a family member of the car owner, you can seek damages from the owner, assuming they have insurance. This is dictated by the Family Purpose Doctrine, which states the vehicle owner is liable for damages caused by a family member. In some cases, this rule won’t apply because the insurance policy automatically applies to household members.
If the owner doesn’t have insurance, you have a couple of options, including claiming from your own insurance, making a complaint to the Texas Department of Public Safety, and speaking to a Texas personal injury lawyer, who can help you recover the compensation you deserve.
What about Non-owner Car Insurance?
It’s also worth checking if the driver of the vehicle has non-owner car insurance. This policy provides coverage to individuals who do not have a car but drive one owned by someone else, such as a friend or family member. Like standard liability policies, non-owner insurance provides coverage for injuries and property damage the driver causes.
What Happens If the Driver Is Not Listed on the Insurance Because the Car Was Stolen?
If the driver who caused your accident stole the car, it’s pretty clear the driver won’t be listed on the policy and the owner didn’t consent to their car being taken.
With this in mind, what are your options for recovering compensation?
In most cases, the owner of the stolen car isn’t responsible for any damages you incur due to the negligent actions of a thief. In this case, insurance does not follow the car, and you’d likely need to file a claim with your insurer.
However, there is an exception.
If the theft of the car was foreseeable, the owner of the vehicle might be liable for any damage (such as injuries sustained in a car accident) that occurs. This can happen if the owner of a car leaves their vehicle unattended with the keys in the ignition, and an eyewitness or expert can testify that this was the case.
Determining Liability and Claiming Compensation after an Accident When a Driver Is Not Listed on the Insurance
In all personal injury claims, liability lies with the person responsible for the accident. In a typical car accident where both drivers own their vehicles and have insurance, claiming compensation is more straightforward. Assuming you can prove the other driver was clearly at fault, you — with the help of your car accident lawyer — can negotiate a fair settlement with the driver’s insurance company.
However, when one driver has borrowed the car, things get a little more complicated.
Your first step should always be to get in touch with a car accident lawyer. They will look at your case and determine who to seek compensation from. It’s not uncommon for both the driver’s insurance company and the vehicle owner’s insurance company to get involved and dispute who should pay, so it’s vital to have a lawyer on your side who knows where your best chance at securing compensation lies.
Whoever was driving the vehicle that crashed into you, and regardless of whether they had permission to drive the car or not, you deserve to be compensated for your injuries when an accident wasn’t your fault. You shouldn’t be left to suffer and struggle to afford your medical bills just because the person who crashed into you doesn’t own the car they were driving.
Our McAllen and San Antonio car accident lawyers are dedicated to helping car accident victims receive the compensation they’re entitled to, regardless of the circumstances. To find out if you have a claim, contact us today by filling in the contact form or calling 855-LAW-NINJA.