If a friend, acquaintance, or family member borrows your car, it’s natural to expect that it will be returned without anything happening to it. You may not even think twice about loaning it out, especially if they only want to go a short distance. What happens if you get a call that the person who borrowed your car wrecked it?
When you loan out your vehicle, you may not even stop to ask the other person if they have a license or insurance coverage. Then if an accident occurs, you suddenly realize that the person who could be liable for damage is you.
Whose Car Insurance Covers the Car?
It can be hard to understand whose car insurance covers a vehicle when someone other than the owner is driving and there is an accident. Is the car covered by the vehicle owner’s policy or the policy belonging to the person who drives the vehicle?
In most cases, anyone living in your house is covered to drive your vehicle under your policy, unless they have been excluded from the policy. If your friend doesn’t live with you but you gave them permission to drive the car, they are usually covered by your car insurance. A general rule of thumb is that car insurance follows the vehicle, so the coverage that belongs to the vehicle is the primary coverage if a wreck occurs.
When Your Friend is at Fault
If your friend was responsible for causing the accident and you don’t have collision coverage on your policy, damages to your car are not covered. Even if you have collision coverage, you will end up having to pay the deductible to have the vehicle repaired, or try to get your friend to pay it.
Since your car insurance is the primary policy, you would have to file the insurance claim with your insurance company and accept any resulting rate hikes.
When Are You Considered Liable?
If you excluded a driver from your policy because you knew he had a bad driving record and would cause your insurance costs to increase but he drives your vehicle anyway, your policy will not pay for any damages he causes.
You may be sued for damages if you allowed an impaired or unlicensed driver to operate your vehicle. In California, if you are the parent of the driver, you may be held liable for any negligent acts caused by your child.
A Word of Caution
If there is any doubt in your mind about whether the other driver has a license or is unimpaired, the responsible thing to do is refuse to lend them your car.
Whenever you loan your car to another person, you are actually taking responsibility for the actions of that person. An accident can happen at any time, even when simply driving around the block. Be cautious about who you loan your vehicle to.
What if the Person Borrowing the Car was Injured?
It’s also possible that your friend was in a wreck and was injured. If your friend was not at fault and had permission to use your car, he is not liable and neither are you. The driver of the other vehicle is liable.
If this happens, be sure to speak to a personal injury lawyer before speaking to the other driver’s insurance company. The other insurance company will try to get you to settle for less than you deserve. Kuvara Law Firm is here to help. Fill out the form on this page and one of our lawyers will be in touch shortly.