Sometimes in life, you’re in a position to lend out your car to a friend, in-law, or a colleague, but you refuse to do so because you are not sure what the implications are. Other times, you may have a reason or two to borrow a friend’s or family’s car, but again, you wonder what this means or if it actually means anything.
What are the issues surrounding allowing a babysitter, employee, or even anybody to hop behind your steering wheel? Does the law allow using someone else’s car? And what happens in the event that they get in an auto accident? Will their insurance cover the damages or mine? You’re about to find out all there is to know about all these issues and more.
So, Can I Lend My Car Out?
Generally, borrowing your car out or letting someone drive with your consent is not a problem. If the use is occasional, such as using it for a nearby pickup, you or the borrower should not have any problem as far as it was with your permission. This may not also be a problem if they do so without your consent if you’re okay with it after finding out—the issues set in if they get in an accident.
However, lending out a car may not be straightforward in some cases, especially if an accident happened. Basically, you have the right to lend out your vehicle to anyone, albeit you ought first to make sure the person is trustworthy in terms of driving it carefully and bringing it back safely to you. That is because if they end up in an accident, you may be held responsible since it’s your car.
What Happens If They Get Into An Accident?
Unlike it is believed by many, car insurance naturally follows the car and not the driver. When your vehicle is involved in an accident, paying the insurance is usually your insurance company’s responsibility, depending on the kind of insurance policy you’re on.
The cases largely depend on a number of factors, including if the person lives in the same household as you and if they are listed on your policy or not. These other circumstances may be complicated and require a discussion with your insurance agent.
Typically, you will be responsible for paying the claim, regardless of whether the person that drove your car has their insurance; your car is still the primary payer. However, your insurance company won’t pay unless the investigation reveals that your car’s driver is at fault for the accident. If they are involved in an accident with another vehicle that caused the accident, the other person’s insurance will be the payer.
Your car’s driver’s insurance may also be asked to pay for medical expenses or supplement your insurance when your vehicle is involved in an accident whose claim amount is higher than your insurance policy.
How Your Insurance Covers Your Car and the Driver
The terms of every policy may be different, depending on the insurance company and the state’s laws. Some require that you add a regular car user such as an employer to your vehicle insurance policy. That is why you should always call your insurance agents to ask them questions that bother you.
- A collision or comprehensive insurance takes care of repairing your car regardless of who the driver was.
- Liability insurance covers medical bills for injuries sustained in the accident and repairs to the other person’s car. Liability insurance usually covers the driver even when they are driving another person’s car. Still, they may also come into play when your vehicle was driven by another person as far as you permitted them.
- Medical insurance pays for the injuries sustained by the driver of your car.
Permission In Lending Out Your Car
Whether or not the driver of your vehicle did so with your permission impacts the conditions related to insurance claims. Insurance policies are required to outline those that are covered while driving your car. While some policies cover only you, you may also be permitted to list specific individuals that are allowed as part of your policy. These people are known as permissive users.
Permissive use is a situation where someone has permission to drive your vehicle. Permission includes those named in the policy, such as family members or others, such as friends who only require an occasional use. Drivers that have permission will be covered if they get into an accident when driving your car.
Generally, you will be asked to fill out the names of permissive users while filling out your insurance forms. Others may automatically delegate the permission to household members, although the household may differ from one company or state to another.
When someone drives your car without your precise or implied permission, that is a non-permissive use, and they will generally not be covered by your insurance if they get involved in an accident. The non-permissive user’s insurance will be responsible instead.
It is essential when lending out your car to consider different factors. It may not be a good idea to allow everybody to drive your vehicle, even though it is permissible under the law. Other things you should be aware of are the kind of policy covering your car and the details of the policy. Speak to your agent to help you understand state laws and policies before going ahead.