This question often comes up in our agency: “Is my friend covered to drive my car?”. The answer to that is not as black and white as you might think and our answer often resembles something along the lines of “It depends.”.
To get a better understanding of the nuances of this often asked question, our friends at Grange Insurance has put together the following article.
3 things to keep in mind before you loan your car
“Have you ever loaned your car to a friend or family member when they were in need? It’s a kind gesture, but if they were to get in an accident behind the wheel of your vehicle, you may be uncertain whose insurance will cover the costs.
Since accidents can happen at any time, it’s important to understand how your coverage works and ultimately who will cover accident-related costs. Here’s what to know before you loan your car.
Know your coverage.
First, it’s important to know if the driver is covered by your insurance. Family members living in your household are typically covered by your insurance unless you expressly exclude them from your policy.
If a friend or a family member who is not a member of the household borrows your vehicle with your permission and gets in an accident, you may or may not be liable for some of the costs depending on your policy, the state you live in, and if the other driver carries their own insurance. Always check your policy and be familiar with how your coverage works so you aren’t stuck with surprise costs after an accident.
Understand who pays.
There’s a common misconception that the driver’s insurance will always cover an accident, but that’s not always the case. Most times, car insurance follows the vehicle. However, exact coverage will depend upon the language in your policy and the state you live in, which is why being familiar with the in’s and out’s of your policy is so important before someone loans your car.
There are exceptions, of course. If the accident wasn’t your friend or family member’s fault, the other driver will pay for the accident and your insurance will be unaffected. Or, if your vehicle is stolen and crashes, you will not be held liable for damages or injuries. However, damage to your own vehicle will most likely be covered under your insurance.
If there’s a chance someone will regularly use your car, include them on your policy. And, always make sure you are lending responsibly. You could be sued for damages if you let an impaired or unlicensed driver operate your vehicle.
There are many scenarios that can play out when someone borrows your car, which is why it’s important to understand the terms of your coverage and be familiar with who is covered under your insurance policy. If you have questions about the terms of your insurance, be sure to reach out to us.”
Article courtesy of Grange Insurance