Cleaning up a car accident can be complicated. It can get more complicated if you weren’t driving your car but instead had a friend behind the wheel. part of the complication revolves around who pays if your friend crashes your car.
buckle up as we take you down the path of this potentially bumpy problem.
car insurance typically follows the vehicle, not the driver
Car insurance typically follows the car, not the driver. So if you lend your car to a friend, your own car insurance is usually primary for anything that might happen to your car or the driver during that time. For example, your collision insurance will likely cover damage to your vehicle, and your liability insurance may cover damage or injury to another driver caused by your friend.
Your friend’s insurance normally wouldn’t cover damage from a crash while driving someone else’s vehicle.
Usually your insurance pays for your friend’s accident, as long as your friend has a driver’s license and doesn’t regularly borrow your car. (If he’s a regular driver of your car, he should be listed on your policy anyway.)
Your friend’s insurance would be considered secondary coverage if your insurance limits are exhausted because bills for damages and injuries exceed your policy amounts.
However, not all policies are equal in this regard. For example, certain auto insurance policies exclude other drivers, including family members in your household, unless your policy specifically includes those drivers. These “cut-down” policies are usually sold as very cheap policies by poor carriers. One of the reasons they are so cheap is because they exclude everyone except the primary driver or offer only limited coverage for other drivers. If you’re buying a standard policy from a reputable auto insurer, you won’t have to worry about this.
Furthermore, you may not even be liable for damages or injuries arising from an accident when your friend is behind the wheel of your car. If the crash is not the friend’s fault, the financial responsibility may fall to other drivers who are at fault.
permissive vs. non-permissive use
“permissive use” simply means that your friend had permission to drive your car.
What if a friend borrows your car without your permission (known as non-permissive use)? In some cases, your friend’s auto insurance will kick in as the primary coverage, not your coverage. But if your friend doesn’t have auto insurance, he may need to convert his policy to cover damage or injury.
Here’s another twist. Let’s say the accident involving your friend causes $17,500 in damage to someone else’s car, but your property damage liability insurance limit is $10,000. In this situation, your friend’s car insurance may have to make up the $7,500 gap.
Even if your own auto insurance policy is enough to cover the entire damage bill, your insurer may still try to recover money from your friend’s auto insurance company, a process known as subrogation.
other reasons for problems with the claim
personal injury attorney patrick salvi, capital managing partner and president of the law firm salvi, schostok & Headquartered in Waukegan, Illinois; Pritchard says that if you lend your car to a friend you know is unfit to drive (for example, was drunk or had numerous traffic violations), you could be liable for damages or injuries related to other motorists.
Also, if your friend was texting while driving or breaking the law, your insurance company might deny a claim for damages or injuries related to your car.
Insurance rate increase
Even if you weren’t in the car at the time, an accident your friend causes to your vehicle can cause your auto insurance rates to go up at renewal.
You could see an even higher increase in your rates if your friend has been living at home and borrowing your car regularly, but didn’t tell their insurance company about this arrangement. the insurer will adjust rates to properly reflect drivers, or it could pay the claim but cancel your policy.
The best strategy is to be very picky about who borrows your car.