Does my car insurance cover passengers?

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Things to know...
  • Basic liability insurance doesn’t cover your passengers, it covers the passengers in other cars involved in an accident
  • State laws affect passenger insurance coverage. Coverage differs between “no fault” insurance states and “tort” insurance states
  • Full insurance coverage doesn’t mean your passengers are completely covered. Coverage amounts and limits are listed in your policy
  • Uninsured and underinsured motorist coverage can help provide extra protection for you and your passengers
  • Auto insurers take medical and disability insurance coverage into consideration when passengers are involved in accidents


What happens if you get in an accident and your passengers are injured? The coverage your car insurance will provide for passengers depends on your state’s laws. State laws also influence the type of insurance coverage the law requires you to have.

Insurers offer different levels and types of passenger coverage. Passenger coverage isn’t often the first thing people have in mind when they are shopping for car insurance, but if an accident occurs, passenger coverage is essential. Compare rates with our free insurance comparison tool above!

What state do you live in?

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The type of insurance coverage your passengers will have is influenced by your state laws. Insurers must comply with these laws. The first step in figuring out what type of coverage your policy will provide for passengers is learning whether or not you live in a “tort state” or a “no-fault” insurance state.

“No-Fault” Insurance States and Passenger Coverage

Twelve states and Puerto Rico have no-fault auto insurance laws. “No-fault” insurance laws mean that fault in an automobile accident does not affect which insurance company pays in case of injuries. “No-fault” laws also limit the right to sue after an accident. The twelve “no-fault” states require residents to buy Personal Injury Protection (PIP) insurance coverage.

An additional four states, Arkansas, Delaware, Maryland, and Oregon, have modified versions of “no-fault” insurance laws. These four states also require drivers to purchase PIP coverage as part of their policies.

– Direct Insureds vs. Indirect Insureds

In “no-fault” states, insurance companies pay benefits after an accident in the following order: policy holder first, other “direct insureds” next, and then “indirect insureds.” In a “no- fault” state, the insurance policy of another driver might pay benefits for your passengers, depending upon the relationships of those involved.

Insurance companies determine whether a passenger is a “direct insured” or “indirect insured.” If you are the policyholder, you are “direct insured.” Direct insureds also include your spouse, partner, and relatives. “Direct insureds” must live in your home with you.

Your insurance will cover your spouse until your divorce decree is final. Employees are covered under their employers’ policies if they are driving for work.

“Indirect insureds” are passengers, operators or drivers who are not the policy holder. Pedestrians or bicyclists involved in an accident are also “indirect insureds.”

– No-Fault PIP Coverage Exclusions

Policy exclusions refer to what the insurance company will not cover, including passenger injuries or losses. Mandatory PIP insurance has some specific exclusions common to all of the “no-fault” states. PIP coverage usually excludes motorcycles, farm vehicles, and commercial vehicles.

Your passengers in an ordinary truck or van, or a 4-wheel ATV or snowmobile, will be covered as long as you’re driving on a public road.

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– Bodily Injury Coverage and Basic Liability Coverage

Insurance policies in the 38 “tort” states use different terms for passenger coverage than terms used in policies written for “no fault” states. Basic liability insurance allowed in “tort” states does not cover payments for injuries to passengers in your vehicle. Basic liability coverage pays for claims of passengers in other cars involved in an accident. Comprehensive and collision insurance covers damages to your car in a “tort” state.

– Types of Bodily Injury Coverage and Limits

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If you compare policies that include bodily injury coverage, you have probably seen coverage amounts displayed like this: $50,000/$100,000. The first number shows the limit of financial damages the insurance will pay for one person injured in an accident (whether driver or passenger). The second number refers to the total amount of damages the company will pay if more than one person is injured.

Bodily injury coverage pays for medical expenses and legal fees, and it may also cover the loss of income, funeral costs, and “pain and suffering” damages awarded in court. Whether or not bodily injury coverage will pay for passengers in your car depends on your policy and coverage exclusions.

Most states require you to purchase a minimum amount of bodily injury coverage. Judgments in personal injury lawsuits are not limited in “tort” states. You should consider the value of your assets and how much bodily injury coverage would protect your home and savings in the case of an accident.

Full Coverage and Passengers

Full insurance coverage doesn’t mean that the insurance company will pay every expense following an accident. Full coverage is an insurance industry definition, meaning an auto policy that includes comprehensive, collision, and liability insurance.

Collision insurance covers damage to your car from an impact, including whether or not you were “at fault.”

Comprehensive insurance coverage pays for damage that occurs when your vehicle isn’t moving, such as a branch falling on the car. The comprehensive portion of your policy could cover damage to a passenger’s property, but the amount paid will be limited by your deductible.

– Underinsured Motorist Protection

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Your liability insurance provides coverage for passengers in another vehicle in an accident. The insurance of the other driver is supposed to pay for your medical bills and lost wages, and “pain and suffering” damages. Problems occur when the other driver in an accident has no insurance or is underinsured, with inadequate coverage.

Underinsured and uninsured motorist insurance protects you and your passengers when an accident occurs. A few states require this type of insurance, but in most cases, uninsured and underinsured motorist insurance is optional. You can add underinsured coverage to your policy as part of full coverage options.

The difference between the two types of coverage refers to coverage for accidents with completely uninsured drivers and with at-fault drivers with insufficient coverage to pay for injuries and property damage.

– Third-Party Claims and Medical and Disability Insurance

After an accident, injured passengers have options for receiving compensation for medical bills. The passenger’s own medical and disability insurance will play a role, but they can also file a third-party claim to your auto insurance company. Passengers who are related to you are “direct insureds.”

They can’t receive a payment from the liability portion of your car insurance and need to file their claim against the other driver’s policy.

Third-party insurance claims are usually limited to the total amount of medical bills, as well as the “med pay” limits provided under your policy.

Insurance terms and rules that vary from state to state and policy to policy sound complicated, and they are. Most people don’t realize that liability insurance doesn’t cover passengers in their vehicle, with limited exceptions. Whether you live in a “tort” state or a “no-fault” state, you can choose the right coverage levels for passengers.

You’ll find the best overall insurance coverage by being aware of your state laws, and by comparing the coverage that different insurers will offer for the passengers in your car and others involved in an accident.

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