If a friend asks to borrow your car, helping them out by letting them borrow your vehicle might seem like an easy decision. But if your friend gets into an accident while driving your car, that act of generosity can become more complicated. Before you lend out your vehicle, ask yourself, “What if someone else crashes my car?” Understanding what might happen can help you prepare, just in case.
If the person driving your car is listed on your car insurance policy, then your car insurance will cover them. Depending on your insurance policy, your insurance will cover the costs of damage to the vehicles of others in the accident, any medical bills resulting from the accident, and the cost of repairing or replacing your vehicle. Your premiums may increase because of the accident.
It’s more complicated if the driver isn’t listed on your insurance policy, and whether your insurance will cover your car will depend on if you gave the driver permission to drive your vehicle. For example, if you lent your car to a friend for the day, this is considered permissive use, and your insurance company will usually cover any resulting damage that would be covered by your policy.
But if your friend regularly borrows your vehicle, like if they use it to get to work every Wednesday, then you need to add them to your insurance policy. If your insurance provider recognizes that the driver is a regular driver of your vehicle, they may refuse to cover any costs resulting from the accident, since the driver should have been added to your policy.
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If another driver borrows your car without permission and crashes it, their car insurance will usually be responsible for paying any related costs. But if that driver doesn’t have car insurance, you may need to file a claim with your own insurance for the damage. It’s possible that your insurance company might deny your claim, and you could be responsible for the expenses.
Generally speaking, your car insurance covers the car, not the driver, so if you gave someone permission to borrow your car, your insurance should cover them if they’re in an accident. Your friend’s auto insurance may act as a secondary insurance policy if the accident’s damages exceed your policy limits.
If you often let another driver borrow your car and they’re in an accident, you could be liable for not adding them onto your insurance. And, if another driver borrows your car without permission, you might be on the hook for the expenses.
Before lending out your car, thoroughly read your insurance policy and confirm that the other driver has a valid license and car insurance. Make sure that you’re comfortable with the potential risks of lending out your vehicle.
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Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.
