Car insurance is one of the most misunderstood and confusing aspects of owning a car. With all of the terminology, deductibles and coverage discounts, many drivers still don’t know when their car is covered let alone when they borrow someone else’s car. If you have ever borrowed a friend’s car while yours was in the shop, you may have wondered whose insurance applies in the event of an accident. Does your car insurance cover it since you are the driver? Or does your friend’s car insurance provide coverage since it is his car? The answer to both of these questions is yes, in certain instances. Let’s take a look at a few of them now.
If the Damage Is Minimal
If the vehicle only sustains minor damage, the collision coverage on your policy will cover the damages regardless of who is at fault. Most car insurance policies cover the car, the owner and anyone the owner lets drive the car.
If the Damage Affects Others
If you are borrowing a friend’s car and get in an accident and there is damage to others, the liability coverage on the car would cover the damages. This includes bodily damages, property damage and any legal fees in the event of a lawsuit. If the costs of damages exceed the policy coverage, the driver’s policy will be used as a secondary form of coverage. The driver’s personal assets could also be used to cover any damages.
If Your Friend Is Injured
If someone borrows your car and they get injured in an accident, their own personal injury protection would cover their medical expenses. If the driver doesn’t have personal injury protection (PIP), he could make a claim against your coverage for damages.
Some Other Important Considerations
Lending a friend your car is a nice gesture, but it isn’t one to be taken lightly. There are some things to consider when lending your car: make sure the driver is licensed as well as insured. Your auto insurance policy more than likely includes an exclusion of coverage for unlicensed drivers which could leave you with a bill for damages caused by an accident.
If you know that a friend will be borrowing your car often, it might be a good idea to add them to your policy. And if you don’t feel comfortable letting someone borrow your car, you could always suggest a rental instead.