Car Accident While Borrowing Someone’s Car – Whose Insurance?
Maybe you were simply trying to be a good friend, a kind neighbor. Maybe you were trying to help a family member or come to the aid of a co-worker. When you allowed them to borrow your car, you never dreamed they would get into an accident. But then it happened, the person who borrowed your car was involved in a car accident.
Now, you are wondering what to do. Who’s responsible? Does your car insurance cover their accident in your car? Let’s explore what happens when the person who borrowed your car gets into an accident, and gain an understanding of how your car insurance handles the situation.
Common Car Insurance Questions
After an auto accident, once everyone is attended to medically, the first questions which come to mind are those regarding car insurance. With that in mind, let’s address the most common questions and answers before delving deeper into the issue.
1. When someone not listed on your policy has an accident in your vehicle, whose insurance will cover the vehicle damage?
The truth is, even if the driver was at fault, the insurance of the vehicle’s owner will be responsible for the accident. There will be a deductible, for which the owner of the vehicle is responsible unless the driver offers to pay. The deductible must be paid if the vehicle is to be repaired. If the owner’s policy has no collision coverage included, there is no coverage for the accident. In either instance, the vehicle owner and his or her insurance is responsible for the vehicle damage.
2. What about liability?
The vehicle owner’s car insurance also covers liability. Of course, in the case of a severe accident, the vehicle owner’s liability may not be enough to cover the damages incurred. If this occurs, the driver’s car insurance, if there is any, will cover additional liability on higher limits.
3. Will Your Car Insurance Rates Go Up Following an Accident in Your Vehicle by Another Driver?
The short answer is yes, probably. When you let another driver use your vehicle, you took responsibility for that driver. In an at-fault situation, even though your driving record is good, you loaned your vehicle to another driver, and that makes you a higher risk. The result, your insurance premium will likely rise accordingly. The good news is the ticket the driver received for his or her traffic violations will not affect your insurance policy or your rates, and the violations only go on his or her record, resulting in a rate increase for the driver as well.
The Whys Behind Insurance and Permissive Use – Florida Laws
While these answers address questions specifically, you may still have questions as to why these are true. You were trying to be helpful and now you find yourself with a wrecked vehicle, increased insurance rates, a court date, and maybe even some relationship issues. Keep in mind, the fact is anyone can get into an accident at any time, so let’s dive deeper into the issue.
Generally, those residing in your household are covered by your insurance policy when driving your vehicle. In some cases, your insurance company may require you to list all the household members who are driving on your policy. Plus, a friend to whom you loan your vehicle is likely also covered as well under the permissive use provision.
Insurance coverage actually follows the insured vehicle, not the driver, which means your insurance is primary coverage in the event your car is in an accident, and in the case of a borrowed vehicle, the driver’s insurance becomes supplemental. As in question one, you lend your car to a friend, he or she has an accident in which he or she is at fault, and you are responsible for filing the insurance claim with your carrier, and paying the insurance deductible and increased premiums that result. Your friend’s insurance will only pay any costs exceeding your coverage limits.
Now, if your friend, the driver, is not at fault, the other driver’s insurance would cover the damages and your insurance would not be involved. This isn’t the only exception to the rule “insurance follows the vehicle,” though, there are others, including these:
- In the event you have excluded, in writing, a member of your household from your insurance coverage, and he or she drives your vehicle, your insurance will probably deny any payment for damages in the event of an accident.
- Should your car be stolen and involved in an accident, you aren’t responsible for those injured or damages, though your insurance will likely cover the damages to your stolen vehicle.
- If a friend or family member uses your vehicle without permission, your insurance coverage would only kick in to cover costs exceeding the driver’s insurance coverage in the event of an accident. (If the driver has no car insurance, your insurance company then becomes liable.)
- Should an accident in your vehicle exceed your insurance coverage, you could be held liable and sued for damage in the event you allowed an unlicensed driver or a driver under the influence borrow your vehicle.
Understanding your car insurance coverage is crucial prior to loaning your vehicle to another driver. You should consider the risks carefully:
- Is the driver responsible?
- Do they have a good driving record?
- Do they have car insurance?
- Do they have a valid driver’s license?
- Can you be sure they will not drive while under the influence?
If you have any doubts, you shouldn’t allow them to borrow your vehicle.
In Florida, a no-fault state, all drivers are required to have auto insurance with personal injury (PIP) benefits which pays medical expenses and other costs in the event of an accident. Thus, personal liability for the vehicle owner can be a big concern if someone borrows your car, has an accident, and liability is challenged.