What happens if you cause an accident in New Jersey while driving your friend’s car? What if you injure someone else in the accident? Whose insurance covers you? What if you are hurt in the accident? Who pays your medical bills? These are all important questions to ask, and, fortunately, the answers are fairly straightforward.
If your friend gives you permission to drive their car, and you cause an accident while driving in New Jersey, the liability insurance coverage that covers that particular car will cover you when you cause an accident in that car. That insurance company’s coverage will serve as your primary source of liability insurance coverage up to its policy limits for that particular accident. (If your friend did not give you permission to drive his car, then his insurance company likely will not cover you, but for purposes of this particular blog post, let’s assume that he did let you drive his car).
Your own personal car’s insurance policy–assuming you have one–will provide secondary coverage to you up to its policy limits. When I refer to liability coverage, I mean the type of coverage that will defend you for your negligence in causing injury to someone else in the accident. If you have an excess insurance policy (commonly known as an “umbrella policy”) it is possible–but not definite–that it may provide additional coverage to you.
Now what happens if you are injured in the accident that you caused while driving your friend’s car with his permission? If you own a car, then that car’s insurance policy should pay for your medical bills in accordance with its policy terms and limits. If you do not own a car but you live with a resident relative who owns a car, then that insurance policy should pay for your medical bills in accordance with its policy terms and limits. If you do not own a car and do not live with any resident relative who owns a car, then the insurance policy covering your friend’s car should pay for your medical bills in accordance with its policy terms and limits.
Confused? You are not alone. Auto insurance coverage is important and you should not assume that you already have the coverage you need. Please feel free to contact me with any questions you may have. I would be happy to speak with you, free of charge, and explain this situation in more detail.