Over the weekend I got talking with a friend over beers, and somehow we got onto the topic of lending your car to a family member, friends or significant other. We both mutually agreed that we’d never lend our cars to anyone for two reasons – We don’t trust anyone driving our cars, and we both drive BMW’s, and surely don’t want to run the risk of someone else burning rubber or any other damage.
After I got home, the discussion we had made me think from an insurance perspective, and I wondered what would happen if I ever lent my car to someone else, and who’s insurance would cover the driver?
While I can lend the car to someone else with a valid driver’s license, it is my auto insurance policy that will provide coverage should there be an accident. Even if the person has a car insurance policy of their own, if they are driving my car, I’m essentially responsible; if they are in an at-fault accident, the accident will go under my insurance history and likely my insurance premium will likely go up. Essentially when you lend your car, you’re also lending your insurance.
Here’s a few things that could happen if you ever decide to lend your car.
When You Lend Your Car
If you choose to lend the car to anyone else, whether your significant other, family member or friend, it is your responsibility that you ensure the following:
- The person borrowing your vehicle must be a licensed driver who is legally allowed to drive.
- You have given permission to the person borrowing your vehicle.
- The person borrowing your vehicle does not use your car regularly.
If The Borrower Gets Into An Accident
If the person you lent your vehicle to gets into an at-fault accident, the claim will go through your policy. Depending on the severity of the accident, your insurance rate may be affected.
The opposite side of an at-fault accident is an accident where the driver is not deemed at fault. If the borrower gets into an accident and they’re not deemed at fault in the accident, generally the insurance premium will remain unchanged.
In general, at-fault accidents are seen as rating factors in determining your auto insurance premium, particularly in the absence of accident forgiveness.
If The Borrower Gets A Ticket
If you lend your car, and the borrower gets nabbed for driving 50 km/h over the posted limit, the ticket is the driver’s problem. Your insurance rate would not be affected. Much like with a lot of things in life, there are exceptions, and exceptions to exceptions. Therefore you should choose your borrower carefully. For example, in the province of Ontario they introduced the Dangerous Driving act, where if someone is caught speeding over 50 km/h over the posted limit, the driver gets an automatic ticket, their license could be suspended, and the car is impounded immediately on the spot.
This creates a two fold problem for you and the driver. You’ll need your car back, and the driver may get their license suspended for a period of time.
If The Borrower Drives Impaired
I should say that no one should ever drive under the influence of anything, but you can only be in control of your self, and not in control of others. If your borrower drives your car under the influence, and has an at-fault or not-at-fault accident – Your insurance policy and driver rating is affected. Driving under the influence (DUI) will place limit on your insurance coverage, potentially limiting where you can obtain car insurance as if you were the driver driving under the influence. Even if your insurance company cancels your insurance policy, and you seek car insurance comparison or a totally new policy elsewhere, your DUI will still show on your driving record.
Accidents can happen to anyone, that’s why they’re called accidents. Anytime you lend your car to someone, you’re also lending your insurance. Everyone will claim that they’re a responsible driver, but you can’t be in control of their driving, and especially of drivers around them. If you choose to lend your car to someone, know what you’re getting into before hand, because car accidents can happen to anyone.
Readers, have you ever lent your care to someone? How did the experience turn out?
All the best!
Photo Credit - Iceninejon