After a car accident, practical questions quickly take center stage. Who is going to pay for the vehicle repairs? How will medical bills be covered? The answers to these questions hinge on who was behind the wheel and the type of coverage available.
Many people are unsure how their coverage works, especially when someone else is driving their car or they are driving a vehicle they don’t own. The uncertainty around whether “does car insurance cover the car or the driver” can lead to costly mistakes when filing a claim. This misunderstanding could result in a delayed settlement or even an unfair denial from an insurance adjuster.
Navigating the aftermath of a car accident is challenging enough without having to fight with insurance companies over coverage. By understanding these core principles, you can be better prepared to handle your claim and take the necessary steps to secure compensation. Our experienced Montgomery car accident lawyers can walk you through how insurance works after an accident in Alabama.
Understanding How Auto Insurance Works in Alabama
Car insurance is a contract between you and your insurer. You pay premiums, and in exchange, the company agrees to cover certain costs if you’re involved in a collision or another covered event.
Alabama operates under a “fault-based” system. This legal framework dictates that the individual who is found to be at fault for causing the accident is financially responsible for all resulting damages, including medical bills, lost wages, and property damage.
When you’re in a collision, you will typically file a claim against the at-fault driver’s insurance policy. Policies usually include:
- Liability Coverage: Pays for injuries and property damage you cause to others.
- Collision Coverage: Pays for damage to your own vehicle from an accident.
- Comprehensive Coverage: Covers non-collision events, like theft or storm damage.
- Medical Payments or Uninsured Motorist Coverage: Provides extra protection if the other driver has no insurance or insufficient coverage.
When Does Insurance Follow the Car?
The general rule that insurance follows the car in Alabama is centered on a legal concept known as “permissive use.” This principle means that if a vehicle owner voluntarily permits someone else to drive their car, their auto insurance policy extends to cover any damages caused in an accident.
For example, if a friend borrows your car to run errands and gets into an accident, your insurance policy usually steps in first because it’s connected to your car, not to your friend.
However, just because the insurance “follows the car” doesn’t mean you’re off the hook. The accident could still impact your insurance record, and in some cases, your premiums may rise.
When Insurance Follows the Driver
While the car’s policy is primary, there are situations where a driver’s own insurance policy comes into play. A driver’s policy often acts as secondary coverage.
- Exceeding Policy Limits: If your friend causes an accident in your car and the damages exceed your policy’s liability limits, their own car insurance policy might be used as secondary coverage to pay for the remaining costs.
- Driving a Non-Owned Vehicle: If you are driving a friend’s car and have your own policy, your insurance might provide certain coverages that the owner’s policy does not, such as medical payments coverage (MedPay), depending on your specific terms.
For example, if the vehicle owner has a liability limit of $25,000 for property damage, but the at-fault driver causes an accident resulting in $40,000 worth of damage, the owner’s policy would pay the first $25,000. The at-fault driver’s own insurance policy could then be tapped to cover the remaining $15,000.
How Coverage Works for Borrowed or Rented Vehicles
If the owner gave the driver permission to use the car, the owner’s insurance is primary. If the driver did not have permission (i.e., they stole the car), the car owner’s insurance would likely deny the claim, and the victim would need to look to the driver’s policy or their own uninsured motorist coverage.
When you rent a car, the insurance you purchase from the rental agency becomes the primary coverage. If you decline the rental company’s insurance, your personal auto policy may offer coverage, but you should always confirm this with your insurance provider. Coverage provided by your credit card is typically secondary and may only cover damage to the rental car itself, not liability for injuries to others.
Why Knowing How Auto Insurance Works Matters After an Accident in Alabama
After an accident, your priority is getting the medical care you need and securing fair compensation for your damages.
Knowing which insurance policy to pursue is the first step in that process and can prevent critical delays and denials that jeopardize your financial recovery.
The difference impacts where you file your claim and the total amount of compensation available. If you were injured by a driver who was borrowing a friend’s car, you must file the initial claim with the car owner’s insurance company. If your damages exceed that policy’s limits, you may then need to open a second claim with the at-fault driver’s own insurer.
Insurance companies are well aware of this complexity and may use it to their advantage. An insurer might try to delay payment by arguing about which policy is primary or wrongfully deny a claim by disputing whether the driver had the owner’s permission to use the vehicle. Without a clear understanding, you could be left fighting a battle on two fronts.
This is why having an experienced car accident lawyer on your side is important. An experienced car accident attorney can cut through the confusion, identify all sources of coverage, and hold the correct insurers accountable for the full value of your claim.
Contact an Experienced Montgomery Car Accident Lawyer
If you’re injured in a car accident, you have two years from the date of the accident to file a personal injury lawsuit. If you miss this deadline, you may lose the chance to recover compensation.
At Hunter | Everage, we help people in Montgomery understand their rights and fight for the compensation they deserve after an accident. If you have been involved in a crash, contact us today at 704-377-9157 for a free consultation.