Auto Insurance Coverage Needs While Test-Driving Cars

Test-driving a car at the dealership may not seem like a risky venture, but there's still a risk that you can damage the car or get into an accident during the test drive. Basic car insurance coverage requirements vary from state to state and it's likely that your dealership carries some type of insurance on the vehicle specifically for accidents incurred during a test drive. In most cases, you will need to sign a waiver before you drive the car, stating whether you will or will not be responsible for any damage to the vehicle.

Here's what you need to know about auto insurance coverage when test-driving a car:

Protecting Yourself Before Test-Driving a Car

Take some time to review your current auto insurance policy to find out what type of coverage you have when driving another vehicle. Whether you have liability, comprehensive and collision insurance, you need to know what you would be responsible for in the event of an accident -- regardless of the car you are driving when the accident occurs. If you do get into an accident during a test-drive, you may end up having to work with your own insurance company to file a claim. Most dealerships will make you sign a form that confirms you do have insurance coverage for driving another vehicle, and that you understand you are solely responsible for all damages incurred during the test drive. Make sure you read all of the fine print on this waiver, and also know how much would be covered with your personal insurance policy.

If you don't currently own a car or have auto insurance, you can either purchase short-term car insurance or take a risk and rely solely on the dealership's insurance just for the test drive.

Dealer's Insurance Coverage for Test-Driving a Car

Some dealerships do have a "garage policy" or fleet insurance for their cars, which includes coverage for people who will be driving their vehicles. This policy is in effect as long as the dealership has granted the driver permission to drive the car, and typically includes liability insurance coverage in case the driver causes damage to someone's property or another vehicle. The driver's personal auto insurance policy can cover damages that are not covered by the dealership's policy. This is why it's still important to find out what your personal insurance policy will or will not cover when driving a car that is not listed on your current insurance policy.

Sources:

Auto Insurance Tips -- Test Driving a Car at an Auto Dealership: Whose Auto Insurance Applies?

Auto Insurance Claim Advice -- Accident while in a test drive

Auto Insurance Stories -- Do I Need Auto Insurance to Test Drive a Car?