Someone Borrowed My Car and Got In an Accident

Common Questions Regarding Letting Someone Borrow Your Car

Have you ever let someone borrow your car only to find out they got into an accident? It is definitely a possibility when you allow someone to drive your vehicle. Many reasons can arise requiring someone else to drive your vehicle, but do you know how your car insurance policy works in this situation? Take a look at how an at-fault accident is handled when it is caused by a driver who is not listed on your auto insurance policy.

Whose car insurance policy covers the vehicle?

Two cars in collision on roadway
Tom Merton/ OJO images/ Getty Images

It can be confusing at a time like this. Is the car covered by the driver’s car insurance policy or by the vehicle’s insurance policy? In an at-fault driver situation, the only way to get coverage on the vehicle is by 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. Either way, the deductible will have to be paid in order to get the vehicle repaired.

Whose liability will cover the driver?

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 doing 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, he got a traffic ticket too. Any driving violations received by the driver, will not affect the vehicle’s insurance policy. Traffic violations go directly onto the driver’s license of the driver. Now 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 with your 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?