Before you hand over your keys, it’s a good idea to confirm how insurance applies if you let someone else drive your car. What happens if your friend crashes your car and hurts another driver? What if they get a ticket? Consider the answers before you let anyone else slide behind the wheel of your vehicle. It’s also wise to understand these potential issues before you drive anyone else’s car.
Car Insurance Usually Follows the Vehicle
In general, claims that arise from your car’s use—no matter who’s driving it—will likely first land with your insurance company, as long as the driver had your permission to drive.
Bodily Injury and Property Liability Insurance
If your friend, grandkid, or roommate borrows your car and injures someone else or damages their property, your auto insurance’s bodily injury liability or property liability coverage will generally step in to cover the claim. If the claim is higher than your coverage amount and the driver also has insurance, their coverage may make up the difference.
Comprehensive and Collision Coverage
Collision coverage pays the costs of accident-related damage to your vehicle, while comprehensive coverage applies to the costs of damage that isn’t collision-related, such as a bird hitting the windshield. If you don’t have comprehensive or collision coverage and your friend borrows your car and damages it, your insurance company will not cover the costs of repairing the damage. Even if your friend has their own collision or comprehensive coverage, their policy likely won’t cover any damage to your vehicle. You may need to have a potentially awkward conversation with your friend about repairs.
When the Driver’s Car Insurance Might Apply
In some situations or states, specific portions of your friend’s insurance policy may step in to help cover costs that go beyond your policy’s limits or that aren’t covered by your policy. Think of the borrower’s coverage like a backup policy. For example, if the person borrowing your car causes more property damage than your car insurance covers, their insurance may step in to pay the remainder of a claim.
PIP, Medical Payments, and Uninsured/Underinsured Motorist Coverage
Personal injury protection (PIP) insurance, medical payments coverage, and uninsured/uninsured motorist coverage vary greatly from state to state. Some states require certain types of coverage, such as PIP, other states allow drivers to decline certain optional coverages (like PIP insurance), and still more states don’t have any requirements. The differences between states and policies can make it extremely confusing to sort out financial responsibility when it comes to injuries resulting from a collision. For example, the driver’s PIP insurance might cover some medical expenses or other personal injury costs for the driver or passengers, depending on the state and policy. If the driver doesn’t have PIP but you (the car’s owner) do, your insurance may pay for injury costs. Contact your insurer to learn more about your coverage for injuries and collisions with uninsured drivers, and how it applies to someone else borrowing your car. Ask anyone borrowing your car to check with their insurer, too.
When Your Insurance May Not Cover Someone Else’s Accident
Your car insurance may not pay for any damages in specific situations. It’s essential to ask your insurance company about any exclusions, exceptions, or limitations before you hand over the keys to anyone who isn’t named in your policy. Exceptions can include:
Lack of permission: If you didn’t give permission to the driver—whether they’re a friend, family member, or a thief—your insurance policy likely won’t cover damage or injury they cause to others. Special situations: Some owner-only insurance policies cover the vehicle’s owner and no one else. Other policies allow you to exclude specific drivers from coverage, such as a household member with a suspended license. Several insurers may pay less for claims caused by non-owner drivers. Non-valid license: If your friend lost their license and you allowed them to drive your car anyway, your insurance company could deny any resulting claim—and you could be held legally responsible. Household members: If a family member isn’t on your insurance policy and causes an accident with your car, they may not be covered, depending on the insurance company. Commercial activity: If your best friend borrows your car to offer rideshare services, your current policy may not cover that driving.
What Happens if Someone Else Gets in an Accident With My Car?
Whose insurance pays for what depends on several factors, including:
Who is at faultHow many drivers were involvedThe owner’s and driver’s insurance policiesType of damage or incidentState insurance laws
For example, say your friend borrows your car to run an errand. If they’re hit by another driver who’s found to be at fault for the accident, that driver’s insurance will likely pay for damage to your car and your friend’s injuries, depending on the state and how fault is assigned. If your friend is at fault for an accident, your policy will likely pay up to its maximum limits for injury or damage caused. After the limits are exhausted, your friend’s insurance may step in to pay additional costs, or both of you could be sued for damages. In another scenario, say your friend sideswipes a metal barrier and causes $1,500 in damage to your car. You carry collision insurance, which helps repair the deep scrape—but only if you pay your $500 deductible. Will your friend agree to pay the deductible, or avoid your calls?
When an Accident Affects Your Rates
If your babysitter or cousin borrows your car and gets into an accident, it will go on your insurance record. Filing a claim for the damage could raise your rates at your next renewal, although they may not increase if your friend was not at fault for the accident. Again, a lot depends on your insurer, policy wording, and state laws.
What About Tickets?
Tickets typically follow the driver, not the car. So if your friend gets a speeding ticket, it will typically affect only their driving record, not yours. In some places, violations issued by traffic cameras (such as red-light tickets) are the responsibility of the vehicle’s owner, not the driver, and may not go on anyone’s driving record.
Should the Other Driver Still Have Insurance?
In a best-case scenario, anyone borrowing your car has their own auto insurance policy. That coverage can help cover any liability costs that go beyond your insurance limits or, in some cases, any injuries. If your friend doesn’t have insurance and is at fault for the accident, you or they could be sued to recover additional damages, which could place your assets (such as your savings or home) at risk. Non-owner insurance may be an option for people who regularly need to borrow cars.
