What happens when you lend someone your car, and they get into an accident? How does the insurance work?

Question

Does the owner's insurance get used, or does the person who was driving the car use their own insurance? Also, is it techically "legal" to let someone else drive your car without putting them on your insurance? What if they just borrowed it once or twice and got into an accident? Does the owner get penalized by his/her insurance company, or will the owner's insurance even cover the accident?

Just something I have wondered, especially since I have had to drive my fiancee's car around the past few days since my car is in for repairs. I am not on his policy, and I don't PLAN on having an accident, but I like to be prepared with knowledge. Thanks!

Answer 1

Wow! There are quite a few wrong answers to your question. Some people are right on track, though.

Insurance follows the car. So the owner's liability coverage would pay up to its limit first and the driver's liability coverage, if any, would pay up to its limit to cover any remainder. Every company and state vary in their coverages. It will affect the owner's premiums.

It's best for your fiancee to contact his insurance company to let them know you'll be driving his car. If you'll only have his vehicle for a few days, most likely there won't be any additional premium.

Many states do allow people who live together or who are engaged to be on the same policy. This could save you money in premiums and then you wouldn't have to worry about it, but you probably don't want to join policies if the other person has had accidents, tickets, or a poor credit rating.

Answer 2

Your insurance policy will state who (usually an age group) of people are eligible to drive your car. You can call them and ask if you are unsure what you have stated in your policy. Also, if someone else is driving your car and they crash, it is your insurance that is to pay for the damage, as it is your car that has crashed (the other person wont have an insurance policy on your car!) The excess cost of damage is always a higher amount if the person who has had the crash is not listed under allowed drivers on the policy.

Also, if you have a crash, your insurance company will lower your "Rating" and therefore your premiums are a bit higher until you can prove you are a good driver so they can put your premiums back up. (Unless of course you are a Rating 1 for Life - Protected).

Hope this helps!! Good Luck and drive safely!

Answer 3

There is what is called "uninsured motorist" coverage that is manditory in some states. What this means is that anyone with an insurance policy can drive anyone's car and if there is a loss, their insurance company will pay. Secondly if the borrower of the car does not have a policy, the car owner's insurance will pay out the claim (assuming that the borrower of the car is at fault). So consider the following scenarios:

1. We both have cars and insurance and I loan you my car and you rear-end someone. Your insurance will pay for the damage.

2. I own a car with insurance but you do not have either. I loan you my car and you rear end someone. My insurance will cover the damages.

3. I own a car, neither of us have insurance, and I loan you my car. You rear end someone and its your fault. The insurance policy of the other person will cover them under the "uninsured motorist" laws.

Answer 4

The insurance policy follows the car, not the person. So no matter who is driving the car, if an accident occurs, the primary person who has insurance on the vehicle is responsible and their insurance will have to cover it. You can drive the car as long as it is insured and not have any problem. I would ask your boyfriend to give you a copy of his insurance card to keep in the glove box just in case you are pulled over.

Answer 5

The car is insured, not the driver. The insurance company may not like it if someone else is driving, but the car is still insured in case there is an accident. If you have insurance, check your policy to see what it says about driving someone else's car.

Answer 6

It probably depends on the state the car is insured in. For example, Texas is a "no-fault" insurance state. This means that if you hand your keys over to anyone to drive your car, your insurance is responsible for any damage done by your car regardless of who is driving. After the deductible of course. Every state is different. Just so you stay happy with your fiance, it might be a good idea to put his car on your insurance or at least talk to your insurance agent and find out what he or she suggests you do to cover everyone in this situation. It may mean you do nothing and pay nothing, but it is worth it to find out.

Answer 7

Depends on your insuramce company and your policy. The policy usually applies to the car not the driver so someone else couldn't use their insurance on your car. If you drive someone else's car and are not on the policy, a lot of times, the insurance will not pay meaning that you or the owner of the car has to pay out of pocket. WHy doen't your fiance put you on his policy? He can do that even though your not married yet.

Answer 8

The insurance is supposed to cover the car not the driver. Being as such since your name is on the policy then you are responsible for the accident that your car got into. If they have their own insurance the moral thing for them to do is to use their insurance to cover it but in truth its on you. And yes your rates will go up. I only know this because my brother used my car to move some things (he had a tiny little convertable and I had a station wagon) and he got inot an accident. I tried to fight it but it is the car that is covered not you.

Answer 9

if that person is not listed on your insurance, then your insurance is not liable for any payments to you. the only way to get paid for this is to have your fiance file a report saying the car was stolen. you'll do a few weeks time in jail, but hey, at least you were responsible enough to trick the insurance company.

Answer 10

Insurance follows the vehicle not the driver in most cases. So your insurance would be primary and your friend's would be secondary. Now, what does that mean, primary, secondary? It means your insurance would pay the claim first and then if your liability limits are exhausted, then his insurance would pay the rest.

However, your rates will go up.