Car Insurance Coverage and Liability For Borrowed Cars

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 16, 2021

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Tossing someone your keys and letting them borrow your car should never be as casual as it sounds. When you let someone borrow your car, in most cases you are also letting them borrow your car insurance policy. This is not only defined by your policy coverage but also by state law. That being said, you don’t need insurance when you borrow a car because in most states, insurance coverage follows the vehicle. While this does provide you with car insurance for a borrowed car, it does so under the terms of the lender’s policy and not the borrower’s.

Lending Your Vehicle to Someone

Letting someone borrow your vehicle should never be taken lightly. You need to able to trust that person because any damage they cause will affect your car insurance. Make sure the person who borrows your car is responsible, and they are not using it for illegal or dangerous reasons.

Never let someone drive your car that has a suspended license or has been drinking! If they are in an accident, it is your insurance that has to pay for the damages caused, and your premiums that will increase dramatically. If your insurance liability limits are insufficient to pay for the damages and injuries caused by this driver and it was found that you allowed them to use your car, you could be held legally liable for additional money needed to make the other party whole. Further, you could face criminal charges for allowing a dangerous driver to use your car.

TIP: Never let someone drive your car that you have knowledge has a suspended license or has been drinking. If they are involved in an accident, you could be sued, be forced to pay for the cost of the accident, or face criminal charges. If someone who is borrowing your car gets in an accident and you are sued, contact an experienced auto accident attorney to help understand your liability.

Frequent Borrowers

It is important to realize that your insurance company bases your premium not only on your car, but on the primary driver of that car – you. If someone else starts driving your car on a regular basis (more than just occasionally) contact your insurance company and have them added to your policy. Be aware that adding someone to your insurance policy can change your rates.

If your insurer finds out that you are no longer the primary driver, or that you are insuring a car for someone else to drive, they may deny your car insurance claim based on you providing false information at the time of your application

Can You Drive Someone Else’s Car

Likewise, when you borrow a car, you will borrow their car insurance as well. While this means you have car insurance when borrowing a car, it does not mean that you are fully protected. You need to know the insurance coverage of the other person before making a decision to drive a borrowed car.

TIP: Beware of driving someone’s car if he or she has little or no insurance as your policy could be triggered once their limits are exhausted.

If you get in an accident in a borrowed car, you are only covered to the extent the person’s policy protects the vehicle. The borrowed car insurance may be insufficient to settle all the damages and injuries that resulted from the accident, and any additional amount of money can fall on your shoulders. Relying on the car insurance for a borrowed car can have serious consequences, and you need to think twice about borrowing a vehicle as an accident can prove costly.

Never assume that you’re covered. It is always best to contact your insurance carrier if you have doubts about your coverage or the rules of your policy pertaining to those that borrow your car. If you need to adjust your car insurance policy because you allow someone to use your car frequently, click here to visit the Free Advice quote center to find the best policy for your needs.

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