Lending your car to a family member or friend can be a kind gesture but you need to be aware of all the percussions for doing so. In most cases, doing so is perfectly safe. But one question we get a lot is “does my insurance cover my car if someone else has an accident?” Before you lend your car, make sure you and the person driving your car understand the responsibilities that come with driving a car that isn’t theirs. Here are some things to know before you hand over your keys:
The Insurance is for the Car, Not the Driver
Simply put, the insurance follows the car, not the driver. If someone borrows your car and they get into an accident, it is you, the policyholder whose future premium will be affected. Also most importantly, by lending your car, you assume full responsibility for the actions of driver and you could be held liable. This is the case even if the person driving your car has his/her own insurance policy. That means the claim will go on your record and not that of the driver who borrowed your car.
Knowing that the claim goes on your insurance is important. If the person driving your car gets into an accident and is at fault, that at-fault claim will stay on your record and can lead to a higher insurance premium for you. If you have collision coverage your insurance will likely also pay for the damage to your car even if the person who borrowed your car has their own vehicle insurance.
To simplify, consider it like this: you, the owner, bears all responsibility for everything that happens to your car even if you aren’t present at the time of the damage. This includes damage of property, or injury to other people.With that in mind, make sure you fully trust the person you are lending your car to and know that they are a safe driver.
Your Checklist for Lending Your Car
While handing over the keys to your car is easy enough, there are some steps you should take to ensure you’re legally covered when someone borrows your car.
- Ensure the person you are lending the car has a safe drive, has no prior at fault accidents or any traffic violations on their driving record.
- Make sure the person borrowing your car has a valid driver’s license.
- Ensure a copy of your vehicle’s registration and proof of insurance are in your car. Let the person driving your car know where to find them.
- Discuss with the borrower where he/she is taking the car and that he/she knows how to operate it.
- Make sure the borrower knows to not let anyone else drive your car.
- Check to make sure all of the critical functions of the car (brakes, signals, headlights) work properly.
As you can see, you should give some weight to the decision to lend out your car. You have every right to choose who drives your car, especially if it means financial consequences for you. When deciding if someone should drive your car, consider their driving tendencies and if they’ve been in any accidents. Those who are trustworthy and with clean driving records are good choices. While this might sound fairly obvious, know that your insurance is on the line and that you are responsible for their actions. Be cautious when lending your car.
To learn more about how you can save money on your auto insurance premium, contact an experienced member of the Bow Valley Insurance team today for a free, no obligation quote.