Significance

• Auto liability insurance follows the car as opposed to the driver. This means that if you lend your vehicle to a friend who has no insurance, your policy will still provide coverage if he is involved in an accident.
  
  

Effects

• Even though you were not the driver in the accident, it may still affect your own policy. Your insurance company could elect to add a surcharge to your premium. However, any citation the driver may receive would impact his own driving record.
  
  

Considerations

• Coverage under your policy depends on whether you gave the driver permission to use your vehicle. If not, this could be considered as a theft claim by your insurance company. Also, if your own liability limits are inadequate, a driver who borrows your car can usually use her own policy's liability coverage for additional protection.