Your friend wants to borrow your vehicle and you agree. You have auto insurance on the vehicle and assume your friend is covered, too.
Unfortunately, your friend gets into a serious accident that causes significant damage to both vehicles and injures the other driver. Now the question is whether your car insurance pay for these damages and injuries, or not? The answer is, that depends.
Your Insurance May Pay the Claim
If your friend gets in an accident, your insurance company may pay the claim if you have the right coverages. Your policy might be considered the primary insurance coverage which could pay for injury or damages. However, since the claim would go against your insurance record it could also increase your premiums.
If your friend isn’t at-fault, the other driver’s insurance may pay for damages and injuries. In this case, you probably wouldn’t need to file a claim.
Don’t Assume Your Auto Insurance Provides Coverage
Many auto insurance policies do not provide coverage unless you add an additional driver to your policy. Others only offer limited coverage if you’ve expressly granted your friend permission to drive your car.
Laws also vary between states which may lead to reduced coverage when you allow someone else to drive your vehicle.
Your Coverage Types are Important
Even if you have insurance and your policy offers your friend some coverage, your chosen coverage types will also affect what your insurance company will pay.
As an example, auto liability coverage would likely pay for the damage caused to another vehicle and the other driver’s medical bills. However, it won’t pay for the damages to your car or medical bills for your friend if they’re injured in the crash.
Your own vehicle repairs would be covered through collision coverage once you pay your deductible. If you don’t have collision coverage, your friend would need to pay for your vehicle repairs.
Your friend may be covered for their medical bills if they are at-fault if you have medical payments coverage. Otherwise, they’ll need to pay their own medical bills.
What If I Didn’t Grant Permission?
Hopefully this wouldn’t happen, but if it does you may not be held accountable. Insurers will pursue your friend’s policy if they have insurance on another vehicle. It would become the primary policy for the claim.
If they don’t have insurance, you may be forced to submit a claim through your policy. Nonetheless, your friend could still be responsible for any costs that exceed your coverage limits.
What Other Factors Could Affect My Friend’s Insurance?
Insurers may also pursue your friend’s auto insurance policy if damages and injuries exceed your policy limits. They may also reach out to your friend’s insurer after they’ve paid out a claim under your policy to recoup some of their losses.
Give us a Call
Give us a call before you lend your vehicle to your friend. We can help you understand your auto insurance policy and look over your friend’s policy, too. Then you can decide whether it makes sense to you, or not.