Who’s responsible when a friend or family member borrows your car and gets into an accident? You might think it’s the driver. But does car insurance insure drivers, or does it insure vehicles? This is the deeper question we’re asking. The answer is quite simple. However, there are unique situations and special circumstances that you may not have considered.
This article will help you know more about what to do if someone borrows your vehicle and gets into an accident. We’ll clear up the confusion on who must pay, as well as how a loaned car in an accident could affect your rates. We’ll also talk about what happens if a teenager gets into an accident.
So, Who Really Has to Pay?
Many believe that the driver who borrows a car must pay if they get into an accident. But this isn’t true. If you let a friend borrow your vehicle, and they wreck it, your auto insurance will pay for the damages. Remember, insurance follows the car, not the driver.
Your insurer must pay the claim because your policy isn’t for you as a person, it’s for your car. For that reason, it doesn’t matter who’s driving a vehicle if an accident occurs. All that matters, in terms of insurance, is who owns it and has coverage on it.
Your insurance will probably cover injuries or damages suffered in an accident. For example, liability coverage would cover other drivers’ injuries or damages to their vehicles, while collision coverage pays for damage to your car. Fully covered vehicles have liability, collision, and comprehensive. Comprehensive, while great to have, doesn’t help at all in a crash or situation like this. Your financial protection ultimately depends on how much coverage you decide to purchase.
There may be some situations where the cost of damage is so high, it exceeds your policy’s limits. If, for instance, your friend was driving at the time of the accident, their insurance would pick up the leftover costs. Or, they’d have to pay out of pocket.
When Your Insurance Pays
Your auto coverage will only cover an accident in two cases:
- You gave the driver express permission to use your car
- The driver is on your policy
It might be worthwhile to add someone to your policy if you know they’re going to be driving your vehicle frequently. Otherwise, you’ll have to see if your insurer allows for permissive use.
What Is Permissive Use?
If you loan someone your car, they’ll likely have coverage because of something called the omnibus clause, or permissive use. Permissive use grants insurance to people not included in your policy. While it’s a common feature on most policies, you should double-check your coverage to make sure you have it.
What Is Non-Permissive Use?
You may or may not have to pay if someone takes your car without your permission and is in an accident. However, it can be extremely hard to prove that someone drove your car without permission. This is, of course, something that can happen at any time in real life. But proving someone took your keys and drove off without your permission is hard for some judges to swallow.
Stolen cars are another matter. If you’re a victim of vehicle theft, you won’t be liable for any damages. Just make sure you file a police report so there’s no question your vehicle was stolen.
Before letting others drive your car, be certain that you trust them to give it back to you in one piece. For instance, it’s probably not the best idea to let someone who has a history of DUIs borrow it. Using common sense before lending could help save your car and your rates.
Sometimes you might have people who you’ve explicitly excluded from your policy. This typically occurs when there’s someone in your household who you don’t want to drive your car due to them being dangerous in some way. Here are a couple of examples of drivers you may want to exclude:
- A teen driver with little to no driving experience
- Someone with a known record of driving violations (DUI/DWI, texting while driving, etc.)
When you’ve excluded someone from your policy, you’ve told your insurance company that the person won’t use your car. If they do and end up in an accident, you’ll be liable for all damages out of pocket. So, ensure that any drivers you exclude stay far away from your car’s steering wheel, even if they “really need it for an emergency.”
How Borrowing Affects Your Rates
Letting someone borrow your car could end up raising your rates. Even if you were careful and lent it to someone you knew you could trust, sometimes life has other plans.
Your rates will more than likely go up if your car was in an accident, even if you weren’t the one driving. This is especially true if the person driving was at fault. Therefore, it’s highly important to understand that the unpredictable actions of others can hike up your rates.
Should someone borrow your car and crash it, you have a few options to keep your rates low. The best of these is to consider switching insurers to one that offers better rates to drivers with accidents on their records. While no provider will simply overlook the blemishes on your driving history, some forgive more than others. That’s why it’s so important to compare quotes when your insurance rates increase after an accident.
Teenagers and Accidents
Teenagers are one of the riskiest groups of drivers on the road. They could likely end up in a fender bender as they learn to drive. Per the Centers for Disease Control and Prevention (CDC), 258,000 teen drivers suffered injuries due to car accidents in 2019.
It’s a smart practice to add your child to your auto insurance if they’ll be using your vehicle often. But before adding them, make sure you know how they can affect your rates. Sometimes, adding teens to your policy can raise your rates because of their increased risk to get into accidents and file claims.
If you don’t choose to add your teen to your insurance, and they do find themselves in an accident while driving the family car, your policy will cover them through permissive use.
Tips for Letting People Borrow Your Car
It can be stressful to let people borrow your car. Thoughts of costly accidents and increasing rates might creep into your mind. But there are some steps you can take to minimize that stress and hopefully decrease the risk of an accident:
Be Aware of Who Borrows Your Car
This might seem like a no-brainer, but it’s incredibly important. You should try to keep your precious car away from people who have a track record of:
- Driving under the influence of drugs or alcohol
- Driving without a license or with a suspended one
- Texting while driving or constantly checking their phone
- Frequently getting into accidents or dangerous situations
- Road rage
In other words, try not to let known bad drivers take your car for a spin. Even if they’re not a bad driver, they should at least have a valid driver’s license. Using good judgment about what kind of driver you allow to borrow your vehicle can pay off big time.
Know Their Intentions
If someone wants to borrow your car, you should ask them what they plan to use it for. Knowing this could help you decide if you even want to let them borrow it. Another good question to ask is how long or frequent they want to use it.
Let’s say someone visits your house and wants to use your car more than a couple of times. You might consider adding them to your policy temporarily in this case. Try contacting an agent if you have more questions about this.
Frequently Asked Questions
Q: What if someone borrows my car, then runs a red light or gets a speeding ticket?
A: If someone borrows your car and gets in trouble with the law, you don’t have to pay for their ticket. Citations, unlike insurance, follow people instead of cars. If the police cite you for something another driver did, consider challenging it in court to keep it off your record.
Q: Do I need auto insurance to borrow a car?
A: No. If the borrowed car has insurance, you’ll generally have it, too. Make sure the insurance has enough protection to satisfy your risk tolerance. If you drive a vehicle with minimal coverage and get into a bad accident, the costs could exceed the limits. And you’d be stuck paying the difference.
Q: What if someone borrows my car and the driver gets a ticket for driving without insurance?
A: The driver of the car would quickly discover what happens when you drive without auto insurance. You’ll be fine. As mentioned earlier, citations follow people, not cars. But whoever drove your vehicle is going to face a big ticket and possibly more severe consequences.
Q: I lent my friend my car, and they totaled it. My auto insurance won’t cover the accident because my friend had a suspended license. What do I do?
A: Unfortunately, you’ll have to pay out of pocket for all the damages. It’s not a good idea to let someone without a valid license drive your car, because your auto insurance won’t cover any accidents.