Your close friend, roommate or family member asks to borrow your truck to move or your car to run an errand. You want to be helpful and lend your vehicle out, but you’re worried about if you’re covered if they’re in an accident. Will your car insurance cover your vehicle if someone else is driving it? Or would their insurance cover the damage? Should you let others drive your car?
The decision to let others drive your car is up to you – but this article will help explain the potential consequences.
Your Car Insurance Covers Your Vehicle, Regardless of Who is Driving
If your friend is in an accident while driving your vehicle, it will be your car insurance that responds. That’s because car insurance follows the vehicle. This also means that you will now have a claim on your record, even though you weren’t the one driving.
Keep in mind if your vehicle is being used for commercial purposes (if someone is paying you to ‘rent’ your car or using it to drive for a ride-sharing company or something similar) you will likely not be covered! Commercial use isn’t covered by a personal auto insurance policy.
If you’re lending a vehicle to someone who lives in the household, they should be added to your policy as an additional insured (if they’re on the vehicle’s registration) or an additional/occasional driver. If they’re already on the policy, you should have zero problems with lending your car to them.
A Lending Scenario
For example, let’s say you lend your car to your friend Pat. While out running his errands, Pat hits another driver in the parking lot. While both vehicles only have minor damage, there is a little scratch and dent.
Pat would need to cover the costs of repair out of pocket or you would need to submit a claim through your insurance company. Pat should provide your insurance and contact information as well as his own contact information.
If the other driver was the one who backed into Pat and your car, they would be responsible for covering damages. You’d still need to file a claim if they were going through insurance but it wouldn’t negatively impact you.
Risks of Lending Your Car to Others
The risks of lending your car to others include:
- An accident damaging your vehicle.
- An increase to your car insurance if there’s a claim.
- Being sued personally for damages if the person wh borrowed your car drives under the influence or is driving without a license.
Should you lend your car to others?
The decision to lend your car to others is yours. However, you should only lend your vehicle to someone your trust who is a careful driver. Accidents happen, but you want to minimize the chance.