Many people often wonder what type of coverage they have if someone they lend their car to gets in an accident. Unfortunately, most do not consider this when they compare auto insurance benefits. This is an important benefit to consider though, especially if you think you may be lending out your car to any friends or family members during the life of your policy.
In general, auto insurance policies follow the car. This doesn’t always make sense to drivers since rates are based on their driving record, not the person they lend their car to, but most insurers follow this rule. It is possible that you would be responsible for coverage if you are driving someone else’s car and they do not have auto insurance. This is unfortunate situation that can confuse drivers.
According to the article “Lending Your Car Can Bring Auto Insurance Concerns” by William Pirraglia on E-Wisdom.com, when you lend out your car to someone, you take on ‘vicarious liability’. Your auto insurance is responsible for property damage, bodily injury, as well as other possible damage charges. Since you gave permission to for someone else to drive your car, you have to accept liability for your friend’s activity. Legally the borrower has no classic insurance liability unless the car has no insurance on it. If someone steals your car and gets in an accident then you would not be considered responsible for liability so that at least is a good thing.
There are a lot of complex exceptions based on a variety of scenarios, so be sure to check with your specific auto insurance policy to see how your insurer will respond to each situation. Knowledge is key in preparation for accidents if you do decide to lend out your car to someone you know.