Ace the 2025 RIBO Exam – Boost Your Insurance Broker Swagger!

The correct answer is that the client's policy would pay for the damages. In situations where an insured individual allows another licensed driver—such as a relative—to operate their vehicle, the primary auto insurance policy typically covers any damages resulting from an accident. This means that the client's insurance would extend to cover the negligence or liability incurred by the nephew while driving the vehicle, assuming that the nephew is an authorized driver under the policy's terms.

In many insurance policies, coverage applies not just to the named insured but also to permitted drivers. Therefore, the client's insurance would likely cover the damages as part of the liability coverage, which is essential for protecting the policyholder against claims arising from accidents caused by insured vehicles driven by authorized users.

By understanding this principle, one can appreciate that the client's insurance is designed to provide a safety net in exactly these types of scenarios.