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Travel Tip: Insurance When Borrowing a Car

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If you’re planning to skip the car rental in favor of borrowing a car from a friend or relative, pay attention.

You may not be covered just because the vehicle is insured. What you want to look for is something called “permissive use coverage.”

This applies to use by another driver who is not part of the household. But this isn’t standard on all policies, so make sure the car owner calls to confirms whether it’s included in their policy.

If the vehicle is being used for business, ask if the plan covers work-related travel. Otherwise, if the policy is for personal use only, commercial claims can be denied. The coverage level may not be the same for people who aren’t policy holders.

Usually, permissive use coverage only extends the bare minimum for anyone else driving the car. Translation: Even if a policy is for $100,000 of coverage, permissive use may only be $10,000.

And remember insurance companies always have a right to deny a claim if the terms of the policy are broken. Unlicensed and even inexperienced drivers are often not covered by permissive use.

For more information, visit the Car Rental & Driving archives.

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