Your friend’s vehicle is in the shop, so he asks you if he can borrow yours for a few hours to run an errand. You agree, hand him the keys, and watch him pull away, wondering if you made a wise decision. Spoiler alert – according to your auto insurance company loaning your car to others is not a smart choice.
As luck would have it, on his way back, your friend takes out a parked car and a fire hydrant while texting his girlfriend in Omaha. Of course, you’re glad to find out your friend’s okay, but the parked vehicle he hit is severely damaged and your front end is completely hammered. Now, you’re wondering…who’s going to pay for this terrible mess? Most people believe the driver, if insured, is liable for an accident he caused, but that just may not be the case.
How Does Insurance Work if Someone Borrows My Car and Wrecks It?
There is a well-known saying in the business: Insurance follows the car. This means your borrowed vehicle is traveling under your policy – not the driver’s coverage.
The general rule of thumb is that, if someone borrows your wheels, they’ve done so with your permission, and they’re going to be considered an insured person under your policy. Known as permissive use, this covers anyone driving your ride with your nod, including members of your household, family members (even your parents), roommates and friends.
This rule does not apply if negligent entrustment comes into play. Negligent entrustment is when you loan your automobile to someone who is clearly not able to operate it safely. For example, someone who is inexperienced, does not have a driver’s license or is under the influence.
Always keep in mind that states may operate by different rules and regulations. Likewise, for insurers – they may differ in their policies when dealing with accidents resulting from lending your car to someone who is not listed in your policy.
What Happens if the Driver Was Breaking the Law When He Wrecked?
The person who was driving your vehicle had permissive use, but he was breaking the law by texting while driving when he caused the wreck. Every state now has laws against texting while driving. In many cases, even if it was you driving, your insurer may not provide compensation in this circumstance.
Insurers like to insert wording in your policy, like the car was being used reasonably and safely when the crash happened. That may not be the case given he was texting. Even if he has his own non-owner car insurance, damages from the event will most likely still be your problem. Should the damages in the accident far exceed the limits of your policy, then the victim typically will turn to the borrower for money. However, both of you could end up being sued for compensation for medical bills, property damage and things like lost wages and emotional suffering.
Hiring an Attorney
In a situation where there are questions about your legal responsibilities, you may consider getting legal advice from an experienced attorney. They will look at the evidence and factors of the crash, including harm to other individuals and resulting damage. They may be able to help you protect your personal assets if someone borrows your car and wrecks it.
Understanding Your Insurance Coverage
It’s a good idea to understand what types of coverage are available, exactly what type of policy you have, and the best auto insurance for you. This information could have an impact on how the scenario plays out in the event you loan your wheels to someone and they crash.
- Liability: Almost every state requires some form of liability, which in most instances includes bodily injury and property damage. This is intended to help pay for injuries and damages suffered by the injured party when you (or in this case, your car) are at fault for an accident.
- Collision coverage and comprehensive coverage: If your automobile is paid off, collision coverage and comprehensive coverage becomes optional but will help pay for damages sustained by your vehicle regardless of who is at fault and if the driver had permissive use. In the event of damage from events such as storms or vandalism, comprehensive kicks in.
- Personal Injury Protection: Along with Medical Payment (MedPay), PIP helps pay for your own injuries and medical expenses.
Exceptions to the above are in no-fault states. If you live in a state that does not assign fault, your liability will help pay for your own medical bills and property damage.
Will This Cause My Insurance Rates to Increase?
It’s likely. If your insurer pays the claim for the accident, you, as the owner of the motor vehicle, can expect higher premiums. As far as they are concerned, the vehicle attached to the claim is what matters, not the driver. And, in a worst case scenario, the fact your friend had his accident while texting – if that’s in the police report – your carrier could simply decide not to pay. Any way you look at it, an innocent gesture could wind up with costs you never imagined. That’s why, the next time a friend asks to borrow your ride, think about the risks.
What if My Car was Stolen and Got into a Wreck?
There are several situations for this type of event. For example, if it was truly stolen, you should have no liability. The best way to avoid this is to securely lock it, use an anti-theft device and never leave your keys where someone may find them. If your car was “stolen” by a roommate who has had your permission to use your ride before on a regular basis and your keys were easily accessible, the line gets blurred a little.
Your insurer may argue that all of this adds up to implied permission and may not cover your claim.
Say Yes to Affordable Car Insurance Online Today
When it comes to loaning out your wheels, you might want to say no. When it comes to saving money, say yes. Check with Freeway Insurance to make sure you’re getting the best rate on your car insurance. Why not get a free car insurance comparison today? Or simply call us at (800) 777-5620 or stop in one of our convenient locations to speak with a live agent and to get the car insurance coverage you need.
