If someone else is driving your vehicle and has an accident, your car insurance policy would pay for the damages. In most states, auto insurance follows the car, not the driver. This means that regardless of who is driving your car, your policy will be considered the primary coverage. If the claims exceed your coverage amount, only then will the driver's liability insurance apply. What's more, even though you were not driving, the claim will still work against you and probably raise your car insurance premiums.
Your auto insurance coverage will only pay for the damages the other operator causes if he/she had your permission to drive the vehicle. For example, if a thief steals your vehicle and has an accident, your insurance company would not be responsible for the damages because you obviously never gave your permission to the driver. Similarly, some auto insurance policies contain specific exclusions regarding who may and may not drive your vehicle. For instance, your policy may have an exclusion about drivers under the age of 18, even if they have your permission to use the vehicle. In this case, the insurer would deny any claims related to an accident that occurred while the excluded operator was operating the vehicle.
If someone else damages your vehicle while driving it, your policy will only pay for the damage if you carry collision coverage. In other words, a liability-only policy will not reimburse you for the damage done to your vehicle, just the damage done to other people and property. Of course, you always have the option to sue the driver of your vehicle for damages in this case. However, if the operator of your vehicle was not at fault, then you would want to sue the driver responsible instead.
As you can see, allowing someone else to drive your vehicle can have serious financial consequences for you. Before you allow anyone to drive your vehicle, make sure you understand how your auto insurance policy would handle an accident. If necessary, talk to your insurance agent about your state's laws and the stipulations of your policy. Review your policy for exclusions that may disqualify certain operators from receiving coverage in your vehicle. Remember that even if the person driving your vehicle is at fault, ultimately, it's your insurance rates that will be affected in the event of a collision. If you have someone who drives your car regularly, you should consider adding him/her to your policy as a named driver to minimize your liability and risk.