Who Is Liable If Your Friend Crashes Your Car?

Who Is Liable If Your Friend Crashes Your Car?

It’s that dreaded moment when you crash your friend’s brand new car into another car, into a curb, or into a lamppost. It’s even more dreaded if you’re the friend who loaned the car out. What’s the protocol for this situation and who has to pay? Liability insurance will cover any costs for damage, bodily harm, and legal fees that come from an accident caused by your vehicle. Here’s a breakdown of what happens when your vehicle is at fault for an accident.

Let’s assume you gave an insured friend the permission to borrow your car. You might think in this case since your friend caused the accident that his or her insurance will pay the costs but in fact, you’ll still be held responsible. Auto insurance policies cover your car, meaning that you, and anyone else who drives it with your permission, are covered under your insurance policy. You’re still responsible to pay the deductible and the higher insurance rates that come with accidents caused by your car. If you loan your car out and it’s in an accident, you’ll be paying for it for awhile so keep that in mind the next time a friend asks to borrow it.

If your insured friend causes a lot of damage to property or causes bodily harm to someone else and the damages exceed your policy limit, then you’re your insurance companies can divide the costs. This is called “pro-rata” in the insurance world. If your friend uses your car without your permission, then the costs will be solely theirs and their insurance coverage will apply to the damages. As long as your car is at fault for an accident, you’ll be responsible for covering at least some of the damages if you gave someone else permission to use it.

You should loan your car out to an uninsured friend with extreme caution as your insurance coverage will be liable for any damages that are caused by your car even if you aren’t driving. If your friend comes without their own insurance, all costs will fall into your lap so even though they surely didn’t mean to, your uninsured friend is causing you a world of trouble by crashing your car.

Before loaning out your car, it’s a good idea to have a firm understanding of your policy and what your insurance company will and won’t cover. Insurance companies can provide you any policy information via email, over the phone, by fax or, postal service. If you have a hard time understanding the language within your policy, then ask your insurance company directly what happens if you loan your car out and then there’s an accident.

The bottom line is to not loan your car out to a friend with no insurance unless it’s an emergency and even then, opt to do the driving yourself. You should even be wary of loaning it out to an insured friend because they could cause you a lot of annoying effort, paperwork, and legal duress for something you weren’t involved in at all.

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