Assume my friend and I are both licensed and have insurance for our own cars, but we're (obviously) not listed under each others' insurance plans.
Let's say one of us borrows the other one's car (with permission) and has an accident.
Whose coverage is responsible at that point to satisfy the legally mandated insurance coverage? I am trying to figure out whether I would have all the insurance that I would be required to have if I borrowed another driver's car instead of using my own, and if so, who would be providing it. I assume that's only coverage against damage to others (which should go under liability insurance?) but if I'm wrong please correct me.
Is the lender's insurance supposed to cover it?
If so, wouldn't this not make sense? Insurance companies look at your driving history (& risk) when they offer you a plan, and if the borrower has a poor history, you've increased the company's risk without their knowledge, right? It would seem to open insurance rates to abuse.
Is the borrower's insurance supposed to cover it?
If so, wouldn't this not make sense? Insurance companies charge you differently based on what and how many vehicles you want covered, so wouldn't borrowing someone's Lamborghini suddenly open your insurance company to a massive risk without their knowledge again?
My guess would be that only my own insurance should matter for this regardless of what car I use, but I don't know how insurance companies do their risk modeling.
If they think people might be riskier with different cars (e.g. maybe I'm riskier with stick-shift than with automatic transmission, I don't know...) then I could see this not automatically being the case, since suddenly I have a higher chance of having an accident and harming someone else, and they might demand more to protect against that. Or maybe the other driver's insurance comes into play too, maybe because, who knows, insurance companies might think risky people are more likely to lend to risky people.