Lending your car to a trusted friend or family member can seem harmless—until something goes wrong. Maybe it’s just a quick trip to the store, or a weekend errand you’re helping with. But if that friend gets into an accident while driving your vehicle, the situation becomes far more complicated. Who’s responsible for the damage? Does your car insurance cover it? And could you end up paying for someone else’s mistake?
Understanding how insurance works when someone else drives your car can save you from unexpected financial stress and liability down the road.
Does Car Insurance Cover Someone Else Driving Your Car?
In most situations, auto insurance follows the car, not the driver. This means that if you give someone permission to use your vehicle, your insurance policy generally covers any accident that occurs while they’re behind the wheel.
However, this coverage only applies if certain conditions are met:
- The driver must have explicit permission to use your vehicle.
- The driver must have a valid driver’s license.
If your vehicle is taken without permission or driven by someone unlicensed, your insurance company could deny the claim. In that case, both you and the borrower may face out-of-pocket expenses for damages or injuries.
In practice, this means that if your friend borrows your car and causes a collision, your liability insurance—which pays for other people’s property damage and medical bills—would likely apply first. If the total costs exceed your policy limits, the driver’s own insurance (if they have it) may serve as secondary coverage.
Who Pays for Damage to the Car?
If your vehicle is damaged while being borrowed, the answer depends on the type of insurance coverage you carry.
- Collision coverage pays for repairs to your own car after an accident, regardless of fault, once you meet your deductible.
- Liability coverage applies when your vehicle causes injury or property damage to others.
The insurance company doesn’t care who pays the deductible—it could be you or the friend who was driving. However, since the policy is in your name, it’s ultimately your coverage that’s being used.
For example, if your car sustains $8,000 in damage and you have a $1,000 deductible, your insurer will cover $7,000 of the cost. Who covers the remaining $1,000 is a personal agreement between you and your friend.
When Insurance Coverage Gets Complicated
Not every borrowed car accident fits neatly into the “permissive use” rule. Some circumstances can change the way liability and coverage are applied:
- Unauthorized use: If your vehicle was taken without permission, the borrower is not covered under your policy.
- Excluded drivers: If you’ve listed someone as an excluded driver on your policy, your insurer will deny any claim involving that person.
- Business use: If your car was used for ridesharing or delivery services, your personal auto insurance might not apply.
- Intoxicated or reckless driving: If the borrower was impaired or engaging in reckless behavior, your insurer might pay damages but later pursue reimbursement from the driver (a process known as subrogation).
These exceptions demonstrate why it’s important to know exactly who’s driving your car and how they intend to use it.
Will Your Insurance Premiums Increase?
Even if you weren’t behind the wheel, your insurance premiums could rise if your car is involved in a crash. Insurance companies associate the incident with the vehicle’s policy, not just the driver.
This means that even if your friend admits fault and promises to pay for damages, your insurer may still view the accident as a claim under your policy—leading to higher rates for several years. Depending on your insurer and claim history, an at-fault accident could increase your premiums anywhere from 10% to 40% or more.
In practice, this means a generous favor could end up costing you long after the vehicle has been repaired.
What To Do After a Borrowed Car Accident
If someone crashes your car, quick and careful action can protect both your finances and your insurance coverage. Here’s what you should do:
- Ensure everyone’s safety. Check for injuries and call emergency services if necessary.
- Gather information. Collect names, contact details, driver’s license numbers, insurance information, and photos of the accident scene.
- Document permission. Make a note that the driver had permission to use your vehicle—this will matter when filing a claim.
- Notify your insurance company. Report the incident as soon as possible. Delayed reporting can result in claim denial.
- Avoid verbal agreements. Don’t accept or assign blame, and don’t agree to pay damages privately until your insurer has assessed the situation.
Following these steps helps establish a clear record and reduces the chances of disputes or claim complications.
Common Coverage Exclusions You Should Know
While permissive use is a standard feature of most policies, there are several exclusions that can void or limit coverage:
- Drivers not explicitly permitted to use the vehicle.
- Use of the vehicle for commercial purposes or ridesharing.
- Unlicensed or underage drivers.
- Intentional damage or criminal activity.
- Drivers specifically excluded on the insurance policy.
Before lending your car, review your policy to understand these limitations. What seems like a small favor can become a major financial burden if coverage doesn’t apply.
Scenario: When a Simple Favor Turns Into a Costly Lesson
Imagine this situation: you lend your car to your friend to pick up a relative from the airport. On the way back, they rear-end another vehicle at a red light. The total property damage is $10,000, and there are $5,000 in medical bills for the other driver.
Your liability coverage caps out at $15,000 per incident. The insurance pays in full, but because the accident was filed under your policy, your premiums increase by 20% the following year. Additionally, your vehicle sustains $3,000 in damage, of which you must pay a $500 deductible before insurance covers the rest.
Even though you weren’t driving, your record now reflects an at-fault accident. This is a common—and frustrating—consequence of letting someone else use your car.
Tips Before Letting Someone Borrow Your Vehicle
Before you lend your car, take these steps to minimize potential risks:
- Verify that the borrower has a valid driver’s license and a clean record.
- Ensure they understand they’ll be responsible for the deductible if an accident occurs.
- Review your insurance policy limits to make sure they’re sufficient for serious accidents.
- Clarify that your car is for personal use only—not commercial or ridesharing purposes.
- If possible, request that the borrower carry non-owner insurance, which provides liability protection for those who drive cars they don’t own.
These precautions can protect you from unexpected costs and misunderstandings later on.
How an Attorney Can Help After a Borrowed Car Accident
Even seemingly straightforward borrowed car accidents can become complex. Questions about permission, coverage exclusions, or shared liability can lead to disputes between drivers and insurance companies.
A personal injury attorney can help you:
- Interpret your policy and explain what’s covered.
- Negotiate with insurers to ensure you’re not unfairly blamed.
- Defend against claims if the other party files a lawsuit.
- Pursue compensation if your own vehicle or finances were affected by another driver’s negligence.
In practice, legal representation ensures you aren’t left paying for damages that should be covered by insurance—or caused by someone else’s carelessness.
Need Legal Help? Brandon J. Broderick, Attorney at Law is One Phone Call Away
Lending your vehicle can seem like a simple favor, but when accidents happen, the consequences can be overwhelming. Whether you’re the car owner dealing with insurance complications or the borrower facing liability, Brandon J. Broderick, Attorney at Law can help you navigate the legal and insurance complexities that follow a borrowed car accident.
Our experienced team handles everything from negotiating with insurance adjusters to protecting your rights in injury and property damage claims. We’re dedicated to turning setbacks into comebacks for everyday drivers who find themselves in stressful, confusing situations.
If you’re facing an insurance dispute, denied claim, or liability question after a borrowed car accident, don’t face it alone. Let our legal team guide you toward the best possible outcome.