Someone Borrowed My Car and Got In an Accident
Have you ever let someone borrow your car only to find out that they got into an accident while driving your vehicle? 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?
It can be confusing at a time like this. Is the car covered by the driver’s car insurance policy or by the vehicle owner’s insurance policy?
When Your Friend Is At-Fault
In an at-fault driver situation, the only way to get coverage on the vehicle is by the owner of the vehicle’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 owner of the vehicle’s insurance policy will provide 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 My Car Insurance Rates Go Up?
By allowing another driver to operate your vehicle, you are taking responsibility for the driver. Most insurance companies will surcharge 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 will be reflected in your insurance premium due to being a higher risk.
Will a Ticket Affect My 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 owner of the vehicle’s insurance policy or rates. Traffic violations go directly onto the driver’s license and record of the driver. Consequently, the at-fault driver’s car insurance rate could go up because of the ticket.
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 own a car needing repairs, but potential surcharges could leave you paying for lending your car out for years to come. Consider the risk the next time you think about loaning your car out. Is the driver often distracted and going on a long trip? Or, are you loaning your vehicle out to a responsible driver with a good driving record for a short period of time?
Ultimately, remember: you are going to be on the hook for the costs of the damage caused by another driver. Is it really worth the risk? Only you can decide, but keep the number of a few rental car places you’d be happy to recommend handy just in case.