I’ve been wondering: Why is it we have to have liability insurance on our cars? I understand the need for liability insurance in general, but why not have it on the driver instead of the car? Then he or she would be covered regardless of the vehicle being driven.
I don’t know about Maine (guessing from your username), but in Texas my liability insurance *does *follow me from car to car. I own (and pull) a variety of trailers, and I don’t need liability insurance on any of them. My truck liability extends to anything I’m towing. My aviation liability insurance also follows me when I borrow a friend’s airplane and as I understand it, my boat liability would follow me were I to borrow a friend’s boat.
My insurance agent has told me often that I needn’t buy extra insurance when renting a car, as the liability follows me there as well.
I hope some insurance experts show up, as I thought this was pretty much universal.
Well, the insurance cards we’re given here (from any company I’ve had since I’ve been driving) have always specified the make, model, and VIN of the car.
For a while, there was a law here requiring insurance companies to notify the state anytime anyone dropped liability coverage on a vehicle. The state then sent you a form that you had to fill out explaining why (“Sold it” was probably the most common answer).
So the impression I get from the State of Maine is that liability coverage is on the car.
I’d double check that if I were you. The rental car thing is just a perk they sometimes throw in that only applies to rental cars. It doesn’t mean you’d be covered if you’re driving a friend’s car or a car you own that isn’t listed on the policy. I assume the coverage extending to anything you’re towing has to do with how the mandatory liability laws are written. There’s some specialized policies for people like mechanics that follow the driver, but for the most part liability insurance follows the car in the US.
As for the why of it, part of it is that there’s a lot of people who have driver’s licenses and don’t drive, but not a whole lot of cars that are registered and aren’t driven. I’m personally annoyed at having to have separate coverage on all my occasionally-driven jalopies, but I will concede that forcing people who rarely drive to have liability policies would be even less fair and harder to enforce. That’s especially true now that insurance is electronically-verified and tied to your car registration.
The diff beween boats planes and cars is that with cars, you can enter into a race to win $1000’s of dollars, crash it into another car and then walk to the police station to report it stolen.
This leaves the owner of the other car chasing an unknown driver …
Also if 4 people drive one vehicle, its too hard to charge each driver 25% ( at least a substantial discount from 100%) of the full rate. They have no way to stop those 25% drivers driving some other vehicle and driving ‘most days’ and yet claiming a discount. With boats and planes its a vocation and you aren’t expecting a discount if you work part time.
I’m not going to pull out my policy, but I’m pretty certain that my policy covers both cars I own no matter who is driving (as long as they have permission) and also covers me when I drive a car I don’t own.
And the reason liability insurance follows the car is because liability follows the car. That may be different with boats or planes, and there may be states where it doesn't work that way, but in many states if I lend you my car and you get into an accident, I am responsible for the damages as the owner of the car whether I am insured or not.I have an “Operator Policy” that insures me as a driver, any and everything I want. Saves me thousands a year.
I wondered about this myself. At one time I owned 5 cars. Had to buy separate liability for each car. Got kind of expensive.
Since I could only drive one car at a time, I figured it was just a rip off by the insurance companies.
Who sells operator policies?
Part of the insurance companies’ calculation is based on the type of car: if you drive a Taurus, they expect different behavior than if you drive a CRX or a Corvette, just based on the kind of people who drive those kinds of cars, and even the effect that a car can have on a driver’s personality.
Dairyland.
All the operator policies I’m familiar with only cover you when you’re driving cars you don’t have regular access to. So it wouldn’t cover a car you or members of your household own, or a work vehicle.
Because that makes for the easiest way to calculate policies.
Lets pretend liability insurance applied to me as the driver. In addition to this insurance I’d need insurance on my car, unless it’s a really crappy one, for theft and collision damage.
As For You pointed out, insurance companies today base some of their calculations on the type of car, obvious for theft and collision, but there are correlations between car types and behaviour, so it also applies to liability. The insurance company can’t know what kinds of car I’ll drive with my liability, so they’ll either have to err on the side of caution or make plans where I promise only to drive nice four door family cards with small engines, or do both, and if I cause a 50 car pileup in a car that my liability plan doesn’t cover, someone still has to pay.
Now what if I rarely drive? Currently I can get a lower cost liability policy on my car based on how little it’s used by reporting the odometer status. With the policy applying to me rather than a specific car, that possibility is out the window.
What if I have two cars and a wife? Now we need four policies to cover liability, theft and collision for us and the cars instead of two, and we’ve lost several possibilities for reducing the cost.
Say I am single. Older cars so only recommended to carry liability.
Really like cars and want to own a bunch of them to drive. Like to pick and choose which car I drive on any given day. And they have to be driven. A sitting car goes to sh… Very quickly.
Seems like some insurance company would want to sell me an operators policy just to get my business. And there must a few more like me out there to justify it.
I would think that if I listed each car I wanted to drive its VIN etc , state whether it has been modified in any way or not the insurance company could easily tell if any of the cars would have a problem with being insured.
The trouble is that state-required liability policies have to be on a car. They can’t just issue you a blanket one on your whole fleet because even if you pinkie swear that you’re the only one driving them, they’re not allowed to deny a claim if someone else crashes one of your cars.
The one exception, which might have something to do with Gatopescado’s policy, is that in New Hampshire and until recently Wisconsin there weren’t mandatory insurance laws. So theoretically in those states insurance companies could have issued operator policies that covered owned vehicles and still deny claims if someone else is driving. But at least in my casual searching, I don’t see any references to those policies ever having existed.
To sum up: 25 cars, one driver, why pay premium for 25 cars?
GreasyJack’s response of “The trouble is that state-required liability policies have to be on a car.” is pretty close but bears some fleshing out. Understanding every state has its own way of doing things, there is a principle known as “permissive use” which is commonly upheld to provide coverage for a previously unknown driver. It’s the old, “Yeah it’s my car, but I let my pal Jimmy drive it like once a month.” In many states, not recognizing “permisssive use” is considered contrary to the public benefit because doing so eliminates a potential money source to help non-negligent parties recover from an accident. In your case then, an insurance company needs to consider the possibility that all 25 of your cars could be on the road at the same time driven by who knows who and their cousins. The insurer needs to collect for 25 exposures because, as mentioned above, even if you pinkie swear nobody else is driving your cars, the insurer will still have to pay when it turns out you bent your word “just this once.” Pretty much the only way out of that would be if you said the driver stole the car.
There ARE policies designed for folks who drive a lot of different vehicles, but those policies cover cars NOT owned by the insured person. Normal car insurance policies already do that if they cover “non-owned” (cars not owned by a named insured or resident relative) cars. In most cases then, my insurance covers me no matter whose car I drive, and it covers my cars no matter who is driving as long as they have my permission to use the car.
You can in Nevada. And there is no need to “pinky swear” because if it gets in a wreck or stolen, there is no policy to file a claim. Its liability only. You wouldn’t file a claim on a car liability policy either.
Side benefit of the Operator Policy: nevermind!
So what happens if you lend your car to someone and they crash it? Is the person you lent it to just SOL?
Never lend your car to someone.
And yeah, both of us are SOL. Financially, legally, other etc.
Let’s say, for the sake of argument I did. When they crashed it into somebody, I would immediatly throw them under the bus, claiming they stole it! The bastard! I’ve know him my whole life! How could you do that to me? 
Never lend your uninsured car to anyone.
You know, now that I think about it, the state does kind of make you “pinky swear”. When you reregister your car online, and it is linked to an Operator Policy, you have to check a box saying you agree with the terms blah blah blah and one of them is that you won’t let anyone drive it.
So there ya go! State sanctioned “pinky swearing”! 