Someone Borrowed My Car and Got In an Accident

Many reasons can arise requiring someone else to drive your vehicle, but you need to know how your car insurance policy works in this situation, knowing how an at-fault accident is handled when it is caused by a driver not listed on your policy.

Whose car insurance policy covers the vehicle?

Teen Driver
Getty Images/Siri Stafford

In an at-fault driver situation, the only way to get coverage on the vehicle is through the vehicle owner’s insurance policy. If the policy does not have collision coverage listed, no coverage is available. The vehicle’s deductible applies. It is between the vehicle owner and the at-fault driver to decide who will pay the deductible, but the owner of the vehicle is ultimately on the hook for the full amount. Either way, the deductible will have to be paid in order to get the vehicle repaired.

Whose liability will cover the driver?

The vehicle owner’s insurance policy provides liability coverage, too. Depending on the degree of the accident, the vehicle’s liability may not be enough to cover the damages. In that case, the driver’s car insurance policy can pick up additional liability if the limits are higher than what were on the vehicle driven in the accident.

Will your car insurance rates increase?

By allowing another driver to operate your vehicle, you are taking responsibility for the driver. Most insurance companies will surcharge a vehicle owner’s policy with an at-fault accident. Insurance companies base your insurance rates on the likelihood of a future claim. Even though your vehicle was loaned out at the time of the at-fault accident, you are a higher risk for having done so. A higher price likely will be reflected in your insurance premium due to being a higher risk.

Will a ticket affect your car insurance policy if it was given to the driver?

Not only was the driver of your vehicle at fault in an accident, but they got a traffic ticket, too! Thankfully, any driving violations received by the other driver will not affect the vehicle owner’s insurance policy or rates. Traffic violations go directly onto a driver’s license and record. Consequently, the at-fault driver’s car insurance rate could go up because of the ticket.

The Bottom Line

An accident under these circumstances is always bad. The driver feels bad and the car owner can’t help but feel irritated. Not only are you inconvenienced by the fact that your car needs repairs, but potential surcharges could leave you paying for lending out your car for years to come. Consider the risk the next time you think about loaning your car. Is the driver often distracted and going on a long trip? Or, are you loaning your vehicle to a responsible driver with a good driving record for a short period of time?