If someone borrows your car and gets into an accident in Texas, whether your car insurance company provides coverage depends on several factors. Generally, insurance follows the car, not the driver, in Texas. So, if the person who borrows your car is a family member or someone you permit to borrow it, your insurance may provide liability coverage.
Read on to understand how insurance works, your legal responsibilities, and if you need to involve an attorney.
In Texas, if the person driving your car causes an accident, your liability insurance covers the property damages and injuries of the other driver up to your policy limit. It doesn’t cover the damages to your vehicle. You need collision insurance to cover vehicle repairs and replacements after an at-fault accident, which a full-coverage insurance policy includes.
Texas follows the family purpose doctrine, which holds the registered vehicle owner responsible if a family member causes damages or injuries, even if they didn’t get permission to use your car.1
Your insurance company may pay insurance claims for vehicle repairs when the driver is a family member, such as a licensed spouse or child. It’s a good idea to review your policy for specifics, as it may exclude coverage for unlisted household members on your policy.
Insurance companies investigate permissive use to determine liability after an accident. Allowing someone to use your vehicle means you accept financial responsibility for any damages or injuries they cause.2
Car owners can provide valid consent verbally or in written form, such as text or email. You can also provide consent implicitly. For example, insurers may argue that you gave implicit consent if you give your partner a spare key and allow continued access to your car. Again, your policy may have limitations regarding permissive use, so it’s best to speak to your insurer for clarification on how it applies.
A driver (other than a family member) is responsible if they use your car without permission and cause an accident. Their liability coverage should kick in to cover the damage they cause, including vehicle repairs and medical bills. Your uninsured/underinsured motorist coverage would kick in if the driver is uninsured. But if your policy limits aren’t enough to cover the cost, the driver must pay for liability expenses themselves.
Personal auto insurance policies exclude coverage for business use. The driver can only use their own commercial auto policy if an accident occurs while using the car for business purposes. For example, if a friend uses your car to drive for a rideshare company, like Uber or Lyft, and gets into a collision, your insurer probably won’t cover it.
Texas is an “at-fault” state or “tort” state, meaning that the at-fault driver is financially responsible for damages and injuries they cause. This means Texas drivers must carry the minimum liability coverage amount that the state requires.
If the at-fault driver doesn’t have insurance, you may have to shoulder costly vehicle repairs and medical expenses. Uninsured/underinsured motorist coverage protects you in this case. It kicks in when a driver with no insurance causes an accident or pays for coverage gaps if the at-fault party has low insurance limits.
Texas law recommends uninsured/underinsured motorist coverage but doesn’t require it. So, you need to opt in to include it on your auto policy.3
Insurance companies won’t cover all incidents someone else causes when driving your car. For example, insurers may deny coverage for non-family members using your car without permission.
Other specific situations that may lead to claim denials include:
If you’re still unsure about insurance coverage for driving a borrowed car in Texas, this additional information may help.
You can sue a friend for crashing your car, but legal action may not be worth it, especially if the accident only results in damage and no injuries. If you permit them to use your car, your insurance company may pay for the injured party’s damages or bodily injuries. If you have full coverage, your collision insurance may also cover your vehicle damages.
Be aware that an accident and using your coverage may increase your insurance premiums at renewal.
The liable party in a car accident in Texas depends on the circumstances. You’re liable if the driver is a family member or if you permitted them to use the car. The driver is responsible if you didn’t permit them to use your car.
In Texas, insurance typically follows the car. Your auto insurance covers liability expenses if the at-fault driver is a family member or has permission from the vehicle’s registered owner. If the driver didn’t get your permission, their car insurance policy may cover liability costs.
No, you can’t just drive anyone’s car. Besides legality and common courtesy, you’ll have to pay for any damages and injuries you cause if you crash someone else’s car without permission. Your insurer may or may not cover you in this instance.
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30+ years in financial services
Clinical Professor of Finance, University of San Diego
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