Letting a friend or family member borrow your car can be a kind gesture, but what happens if they get into an accident? Understanding how your insurance works can help you avoid unexpected costs. Before handing over your keys, here’s what you need to know.
1. Check Your Insurance Coverage
Start by reviewing your policy to see if the person borrowing your car is covered. Generally, family members in your household are included unless specifically excluded.
If a friend or non-household family member drives your car with permission and has an accident, your insurance may or may not cover the costs, depending on your policy, state laws, and whether they have their own insurance. Being familiar with your coverage can help you avoid surprises if an accident occurs.
2. Know Who Pays in an Accident
Many people assume that a driver’s insurance will cover any accident, but in most cases, insurance follows the car, not the driver. The exact coverage depends on your policy and state regulations, which is why reviewing your insurance details is crucial before lending your car.
There are exceptions, though. If the accident wasn’t your friend’s fault, the other driver’s insurance should cover the damages, leaving your policy unaffected. Also, if your car is stolen and involved in a crash, you won’t be liable for injuries or damages to others, but repairs to your vehicle will likely fall under your insurance.
3. Be a Responsible Lender
If someone frequently uses your car, consider adding them to your policy to ensure proper coverage. Additionally, always use good judgment when lending your vehicle—allowing an unlicensed or impaired driver to drive your car could make you legally responsible for damages.
Since every situation is different, it’s important to know the specifics of your insurance coverage. If you have any questions, speak with your local independent agent to ensure you’re protected before letting someone else take the wheel.