Your sister takes your car for the day; a co-worker needs to run a quick errand; your car breaks down and you borrow your neighbor’s van for the week—what kind of coverage is needed or used for these types of situations? You might not be too interested in knowing, until you get into an accident in a friend’s car, or your sibling has a fender bender with your car.
Here are some general and specific insurance rules on loaning cars:
Every car insurance policy is different when it comes to loaning a car, so make sure you know what your insurance says. But there are a few general guidelines:
- Insurance goes with the car – if someone borrows your car and wrecks it, then your insurance is responsible.
- If someone borrows your car and wrecks it, and your insurance is exhausted then the borrower’s policy covers the excess.
- If you borrow an uninsured car, the driver – you – are responsible and liable for any penalties that result.
- If the driver of a borrowed car is uninsured, and causes an accident, you – the owner of the car – could be liable for everything. This could be much more serious than a simple fender bender. For example, if the borrower causes an accident with multiple people and if damages exceed your coverage limits then you will likely be held financially responsible for medical fees and other damages.
- The driver of a borrowed car is responsible for any and all tickets. For example, if your friend borrows your car and receives a ticket, the traffic violation goes onto his or her license, not yours.
- If you loan out your car and it is in an accident, your car insurance rate will probably go up because the company will believe you are a higher risk to the car insurance carrier.
The best thing to do before borrowing or loaning a car is to speak with your insurance agent about your specific policy. Know what you are getting into, know the risks, and be prepared just in case.
To speak with an independent agent about your auto insurance policy, or to request a quote and compare prices, contact us at Bradenton Insurance today!