Who Pays For Damages From Accidents Using a Borrowed Vehicle?

Ever thought about borrowing someone else’s car for one of your road trips or a simple night out? Picture this-- you have successfully talked someone into letting you borrow their car, and then just when you are having such a fun time cruising around, you take a turn and crash the car onto an oncoming car! Naturally, you will be giving your insurance details to the driver. If he has car insurance, he will also provide you with his insurance information. So who will shoulder the cost of repair if you were responsible for the crash? Will your insurance company answer to this, or will it be your friend who owns the car be the one to bear the burden of the repair costs?

Usually, The Car Owner Takes Responsibility

Usually, the car insurance policy of the car owner will take effect in this kind of situation. If there are other items or expenses not covered by the car owner’s insurance, the car insurance policy of the one borrower will be come into force. Keep in mind that different states may have different rules and regulations on car insurance. Likewise, car insurance companies may also differ in its policies when it comes to dealing with accidents resulting from lending your car to someone who is not indicated in the policy as the primary driver.

Take Time To Read and Understand Your Policy’s Fine Print

Your car insurance policy’s fine print is there for a purpose. It is meant to make you understand the coverage and the limits of your policy, so make sure you read and understand it. You should know who will be responsible for the damages in an accident. The car driver is generally referred to as the insured person, regardless if it is the actual owner or someone who is allowed by the owner to use the car.

Avoid Lending Your Car For Long Periods

When you let someone borrow your car, as much as possible, don’t lend it for frequent use or for long intervals. Usually, car insurance policies do not provide coverage for a driver who uses the car quite often, like a couple of weeks each time. If the borrower really needs to use the car for longer periods, then that person has to be indicated in the car insurance policy. If you just lend your vehicle for only a few days in a month, then it is fine to have the standard coverage.

It’ Best Not To Let Anyone Borrow Your Company Car

It is highly advised that you do not lend your company car to your friend or any person other than the one it is intended for. If you let unauthorized persons use your company car, not only will you be going against the rules of the company, you will also be violating the commercial auto insurance policy of the vehicle. If, unfortunately your friend gets into an accident using the commercial vehicle, the insurance will not shoulder any cost for repair.

As a borrower, before you ask someone a favour to let you use their car, it would be wise if you initially ask them what type of car insurance policy they have, and better yet, read the fine print of their policy so that you can have a clear understanding of the financial consequences in the event of accidents. If you get into an accident using someone else’s car, the car owner’s insurance premium will shoot up, and your insurance will also be put in effect if ever there are expenses which are no longer covered by the owner’s insurance. For those who frequently use someone else’s vehicle but do not have any car insurance policy, it would be best to get a non-owner policy. This kind of insurance will provide coverage for liabilities and injuries. This is also cheaper than a regular car insurance plan. It is always best to consider these things before you go out and borrow a friend’s car. The more knowledge you have about this, the more secure you will be when driving a car that is not yours.

Flickr Photo Credit: daveynin