I let my roommate Sarah borrow my car for work one day last year. Her car was in the shop and I thought it would be no big deal for her to take it for the day. Well, she was running late and caused a crash on the way there, and guess what—I was responsible for it.
Well, not just me, but my car insurance, too.
I had to learn the hard way that a vehicle’s insurance is the primary coverage—regardless of who’s driving when an accident occurs. The driver’s car insurance policy acts as secondary coverage, if necessary.
So in my case, I had to file a claim with my auto insurance provider, pay the deductible, and suffer increased insurance rates.
However, that’s just how my story happened. I learned a lot along the way, and these tips might help you if you’re considering letting a friend borrow your car or your friend just had an accident in your vehicle.
Before Lending Your Car to a Friend
Before you let your friend borrow your car, be sure to check:
- Your insurance policy. You can dig out all that paperwork you got when you bought your car insurance policy, but it’s probably easier to just call your agent and ask about the kind of coverage your policy provides if another driver wrecks your car. Typically, policies cover any driver not specifically excluded; however, the coverage could be reduced, so ask.
- Your friend’s insurance policy. Like I said above, the driver’s policy is secondary to the vehicle’s policy. So, make sure your friend has car insurance just in case you end up needing additional coverage.
- Usually, the secondary coverage is responsible when the primary coverage is tapped out.
- The secondary coverage may handle personal liability claims, too.
- Your friend’s driver’s license. You might feel silly, but get over it. Making sure your friend has a valid driver’s license keeps you both safe if there’s a car accident or she gets pulled over.
Also, make sure your proof of insurance and registration is in your glove box before your friend hits the road. Should an accident occur or the police pull her over, she’s going to need it.
Your Friend Has No Car Insurance
Not everyone has auto coverage because not everyone has a car. That’s understandable.
However, if you lend your car to a friend who has no coverage of his own, you could be held responsible for a lot more than just one car accident. For example, what if Sarah had hit one car, causing two or three more to slam into each other in the process?
My car insurance company and I could have been sued for every vehicle involved in that pileup—not to mention every personal injury. There would be no secondary coverage if my limits were exhausted.
Think long and hard before you let an uninsured friend borrow your vehicle.
Wait--Who actually Caused the Accident?
Generally, it’s the at-fault party’s (or policyholder’s) responsibility to cover the accident.
However, if another driver had caused the accident, the other driver would have had to:
- File a claim.
- Pay a deductible.
- Worry about other issues like personal liability.
Again, you should check with your car insurance agent about the claims process after an accident when someone else drives your car.