If a friend borrows your car and gets into an accident, what happens? Who’s responsible? Who pays for damages? These are questions you probably don’t ask before you lend your vehicle to a friend or family member. Still, the answers can have significant financial impacts for you, so you should be aware of what happens when someone else is involved in an accident while driving a vehicle owned by you.
Whose insurance applies when someone else borrows your car?
You may be under the impression that the driver of a car automatically has their insurance apply to whatever vehicle they’re driving, but in fact, this isn’t true. Car insurance, generally, does not follow the driver but the car itself. This is why you have to list any other people in your household who might drive your vehicle. So, even if you’re not the driver, your car insurance will be primarily responsible for paying out in the event of an accident involving your vehicle.
This may prove to be advantageous to you in some situations, such as if your friend has no car insurance — at least your insurance will pay, and you won’t be responsible for it yourself. But if your friend isn’t paying for car insurance, they probably also don’t have the money to pay out of pocket for any damages they cause while using your car, which means that, as the owner, the responsibility falls on you. Remember that even if it were your friend who caused an accident driving your vehicle, your rates would increase if your insurance has to payout.
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Are you liable for damages your friend caused with your car?
If the other driver was at fault for the accident, then you probably don’t have anything to worry about, because their insurance will be responsible for covering damages. If your friend was at fault, however, this could potentially become a significant financial burden for you.
Your insurance will pay up to its limits for any property damage caused by your friend, depending on what your policy covers. If you don’t have collision coverage on your vehicle, you will end up having to pay for repairs yourself.
The bigger problem is if your friend inflicted injury on another person in an accident they caused with your car. As the owner, your car insurance could be responsible for paying for a victim’s medical bills. If your insurance pays up to its limits and it isn’t enough to cover medical costs, then if your friend has car insurance, it may kick over to their company to help cover the remainder. If your friend has no insurance, however, then you may be in for a world of hurt.
The average bodily injury claim in a car accident is over $15,000. If your insurance can’t cover this cost, you could be held responsible as the vehicle owner. This means, for example; you could be sued by car accident attorneys in San Diego to recover the remainder of the money a victim is owed.
How can you avoid paying for someone else’s mistake?
Unfortunately, the bottom line is that you are responsible for any accident caused using your car. This means you need to be cautious when agreeing to let someone borrow your vehicle. Remember that their actions impact you financially, particularly if they have no car insurance of their own to back yours up. Even in the best-case scenario, with no significant injuries or medical payouts, your car insurance rates will increase as a result of your friend’s accident.
So the next time someone asks you to borrow your vehicle, if they are one of the most trusted people in your life, who also has an impeccable driving record, your should refer them to a car rental of auto share, there are many great options out there.