When you lend your vehicle to someone else, it’s like also lending your insurance. You take full responsibility for their actions when driving and any claims must be reported to your own insurance company.
Your buddy wants to borrow your pickup to move a couch or a friend wants to borrow your car to pick up someone at the train station. There are times when we want to help a friend, neighbor or family member - so we hand them the keys and ask they be careful.
Are They Covered?
If your friend gets into an accident or damages your vehicle, your insurance company in most cases will cover the damages, provided the driver:
- Is licensed to drive
- Has your verbal or written permission to drive your vehicle
- Is only using your vehicle for personal use (no paid compensation i.e. deliveries)
- Doesn’t participate in any illegal activity, such as racing or impaired driving.
If your friend is responsible for the accident or damage to your vehicle, you must also have collision coverage on your insurance policy to have your vehicle repaired. The deductible will also apply.
Impact on your Policy
One of the most common myths about car insurance is that when we lend our vehicle, the other driver is covered under their own insurance policy. This is not true.
When you lend your vehicle to someone else, it’s like also lending your insurance. You take full responsibility for their actions when driving and any claims must be reported to your own insurance company. If they’re at-fault in an accident, the accident goes against your driving record, not theirs, and this could greatly impact your insurance premiums and your ability to obtain insurance in the future.