Borrowing vehicles from friends and family can be a confusing part of insurance – what happens if you or someone else borrows a car from a friend? Who is insured? Is it legal? What if they get into an accident? It may not be apparent how your auto insurance policy works in these situations.
Although borrowing a car from a friend can be confusing, but as a basic rule of thumb: the insurance follows the car, not the driver. So, if a friend borrows your car and gets in an accident, your insurance policy would help cover the cost, but it would also go on your driving record. This could affect your future insurance rates since you are deemed a higher liability.
While it is likely that your insurance helps cover damage in these situations, it doesn’t always. Depending on the policy that you have, your friend may not be covered. There are some insurance policies that do not even cover members in your household, let alone a friend. And on the contrary, your friend may have insurance that will cover an accident in this situation.
In the event of an accident, you’ll want to make sure that you have enough coverage. What if your friend’s accident causes damage that exceeds your policy limits? You could be held responsible for paying those costs.
Having insurance regardless of whoever is driving is important. Having auto insurance is mandatory in most states. Depending on where you live, there are coverage minimums. You should have liability coverage as well as bodily injury and property coverage to help protect you and others in the event of an accident. There are other types of coverage to consider as well. For instance, collision coverage can help cover the damage to your car. Comprehensive coverage is another type of coverage to consider since it covers things like theft. Making sure that your car is adequately insured can help protect it in the future, no matter who the driver is. Other things to think about include your deductible and premium for your insurance coverage.
If you are worried about a friend or family member borrowing your car, talk to your insurance agent first. They can talk you through your policy and what would happen in the event of a crash. They are also able to help you get the auto insurance coverage that works best for you and your personal situation. Be cautious in these situations – you don’t want to lend your car out to anyone, especially if they are a notoriously bad driver!