Most people have no problem letting others borrow their car now and then. But most people don’t understand how car insurance works when someone who borrows their car gets into an accident. Before you lend, be sure you understand how accidents are handled.
To make a long story short, car insurance follows the car in the case of an accident, not the person.This means that if someone borrows your car and causes an accident, you could be liable for the damages.
Let’s look at this in more detail.
When the Driver of Your Car is At-Fault
The major consideration when deciding who pays when an accident happens is determining who is at-fault. Generally, the insurance company of the person who is found to be at-fault is responsible for covering the damages.
So even if the person who borrows your car has top-notch insurance coverage for themselves and their own vehicle, that isn’t going to help if they borrow your car and cause an accident. Your own insurance coverage is what matters.
Which Coverages Will Protect You?
Right at the top, if you don’t have collision coverage you will not be covered. This is the main coverage you must carry to protect yourself. Remember also that you will have to pay your deductibles before you will be covered. Maybe you can cut a deal with the person that borrowed your car and caused the accident though.
Liability coverage will be used to pay costs associated with the accident also, but depending on how serious the accident is may not be enough. This is why it is important to always carry enough insurance to cover yourself and the value of your property should you have an accident.
When the Driver of Your Car is Not At-Fault
As stated, the burden of paying for damages and injuries after a car accident falls to the person who was found to be at-fault. The good news is that if you loaned your car and the driver was in an accident caused by someone else, you should be able to recover the costs of repairs and your accident-related injuries from the at-fault driver’s insurance company.
Will Your Rates Increase?
Most insurance companies will hit your policy with a surcharge if the driver of your car was found to be at-fault for an accident. Once there is a claim against your insurance, and the insurance carrier has to pay out, they will consider you a higher risk and increase your premium payments.
While you should consider risk when loaning out your car, you should also make sure you are properly covered and not overpaying for your auto insurance. With our fast and easy form, InsuranceWins can get you started. Simply fill it out and start comparing quotes for the kind of protection you need, even if someone borrows your car.
