The number of unmarried couples living together continues to increase, which CAN save individuals money on the forefront, but what you may not know is that these same people could be faced with lawsuits or auto insurance claims where coverage is denied. Being at this type of risk could be financially overwhelming for unmarried couples. Find out about unmarried couples living together and how it may affect their auto insurance.
A standard N.C. auto insurance policy specifically states that insurance follows the car and not the driver. For example, if you allow your friend (who has a separate residence) to drive your car while her car is in the shop for repairs and she causes an accident, the insurance on your car is considered primary. Keep in mind two very important things here:
- Your friend does NOT live with you
- Your car is not provided or available for her regular use
However, in regard to unmarried couples living together, these individuals are faced with a different scenario. They reside in the same household and possibly both cars are furnished and available for regular use to either party and this is where the potential problem lies.
North Carolina Auto Insurance Policy Verbiage
The typical N.C. auto policy has specific language addressing coverage that greatly impacts unmarried couples living together and their usage of one another’s cars. Your auto insurance policy provides liability coverage for bodily injury and property damage (up to the acquired limits of liability) to others as a result of an auto accident you cause. The liability coverage is provided for the named insured (usually the person who pays the premium and is listed on the Declarations Page), any relatives living in the household, spouse, and any listed driver(s). Furthermore, coverage is extended to someone who drives your car (with permission) and is considered an “insured.”
So, What’s the Issue with Unmarried Couples and Car Insurance?
If you delve deeper into your N.C. auto insurance policy, you will find that the policy specifically excludes the named insured or spouse when driving another car that is furnished or available for their regular use.
Imagine that you and your partner are living together and basically sharing everything, including each other’s cars. Your limits of liability on your car insurance policy are $100,000 per person while your partner only has $50,000 limit of liability per person for bodily injury. Neither of you discussed your acquired limits of liability until an accident happened.
One day, you borrow your partners car and cause an accident that resulted in medical bills to the other driver in excess of $100,000. Since insurance follows the car, there is only $50,000 of coverage available. However, because the vehicle is provided for your regular use, your auto insurance policy may very well deny coverage and you may be held responsible for the expenses. Furthermore, you could be faced with a lawsuit.
Solutions for Unmarried Couples
In order to avoid coverage issues, you could simply add each other to the others’ car insurance policy as a driver in the household. Just make sure you aren’t double charged for the insurance.
You could also just combine the cars under ONE policy. In fact, by doing this, you may receive a multi-car discount up to 25%. This way you both will be operating under one policy with the same limits of liability.
Your N.C. auto insurance policy is filled with provisions, exclusions, and limitations so our job is to provide as much assistance as needed in an effort to provide the right type of auto insurance protection for ALL your needs. If you have any questions regarding unmarried couples living together and how it relates to your auto insurance, give us a call at 828-464-2643.