As leaders in providing insurance coverage for nearly 35 years, clients often ask us if other drivers are covered under their auto insurance article from Calgary insurance broker – Bow Valley Insurance – policy. This explains your coverage when you lend your vehicle to a friend or a relative.
Perhaps a friend needs to borrow your pickup to move into their new home, or pick up a new TV from the electronic shop or before leaving on a vacation, made arrangements with a friend to pick you & your family up from the airport in your SUV as it can accommodate all of you and your luggage. As vehicle owners, it’s not uncommon to have people ask to borrow our car, and we would like to help. But we also need to be sure the vehicle and the person driving is covered by your auto insurance policy.
Will Your Auto Insurance Policy Protect You, Your Friend and Your Vehicle?
You can safely lend your vehicle to someone without worrying about whether that person is named as a driver on your auto insurance policy if the following three conditions are met:
- You’ve given the person permission to drive your vehicle
- The person is a licensed driver, legally allowed to operate a motor vehicle in Alberta
- The person does not use your vehicle on a regular basis and it is one or two time situation over a long period of time
Before You Lend Your Vehicle to Someone Else
Whenever you allow someone else to drive your car there are risks, because unfortunately, even good drivers are sometimes involved in accidents (especially in Calgary!). While it’s not uncommon to lend a friend or relative a car, you’re not just lending your vehicle, you’re also lending your auto insurance and personally exposing yourself to liabilities that may not be covered by your auto insurance or the limit of liability may not be sufficient to satisfy any judgment awarded e.g. your auto insurance provides liability limit of $1,000,000. Perhaps the friend driving your car gets involved in an accident and injures occupants of the other car. The court awards a settlement of $1,400,000 to the injured party. The difference of $400,000 will be your personal responsibility to pay.
If a friend borrows your vehicle and causes an accident, you could be found financially responsible – putting both your insurance rates and your relationship at risk. Before lending your vehicle to someone else, ask yourself the following questions. Does the person:
- Exhibit safe driving habits?
- Have any traffic violation tickets?
- Get easily distracted by their cellphone or other passengers?
- Have charges such as reckless driving, driving while impaired or under the influence?
- Use your vehicle on a regular basis?
To be covered by your auto insurance, even if the person is related to you or is your best friend, you cannot allow someone to use your vehicle as part of their regular routine. For example, if a friend uses your car every Saturday to go to the grocery store, you’ll need to speak with your insurance broker and have that person listed on your policy.
Anyone using your vehicle on a regular basis must be named as a driver on your policy.
Things to Consider Before Lending Your Vehicle to Someone Else
- Whenever you lend your vehicle to a friend or relative, you are also lending them your insurance policy
- If the person is involved in a collision, the accident will go on your insurance record & your future premiums could increase
- Am I prepared to take full responsibility for actions of the friend or relative and am I prepared to pay for any unsatisfied judgment not covered by my insurance? i.e. putting your personal assets at risk – house, savings, investments etc.
We urge you to protect yourself from the serious consequences that could result if someone driving your vehicle is involved in an accident.
Bow Valley Insurance: Your Alberta Insurance Brokers
If you lend your vehicle to others and are not sure whether they should be covered on your policy or under an endorsement on their policy, be sure to speak with us at Bow Valley Insurance we’ll be sure you have sufficient coverage for yourself, your friend and relative. Please Contact Us today if you have any questions!
We’ll answer your questions and make sure you have the protection you need, and if you need insurance in Alberta, our specialists promise to find you the best car insurance at the lowest possible rate. Please request a convenient Online Quote today! And for more informative posts about insurance, be sure to visit our Resource Centre where you’ll find the answers to common insurance questions!