If I Let Someone Drive My Car, are they Insured?
Letting a Friend Drive or Borrow Your Car
Often times, people ask us, “What happens if I let my friend borrow my car?” Or they say, “I let a friend borrow my car and they had an accident. Who’s responsible for fixing my car?”
Whose Insurance Policy Applies in an Accident?
If you loan your car out, you are basically loaning out your insurance too. The way that most insurance policies read is that anyone you give permission to drive your car is covered. It is important that you read your policy and confirm this applies to you!
In the State of Texas, insurance will always follow the car first and the driver second. So even if the person you loan your car to has their own car insurance, you and your insurance policy are still responsible for any damages. This means you will need to pay your deductible to get your car fixed.
If there is an Accident will it Affect My Rate?
Yes, it could. If the driver that you let borrow your car happens to reside in your household then the insurance carrier may require you add them to the insurance policy. Since they have now had an accident, your policy would be charged the appropriate rate for that driver with an accident, along with any other accidents or violations that are on their record.
If the driver does not reside in your household the insurance carrier will not make you add them but they may ask for proof that they do not reside with you. While the accident will not impact you directly it will show as a claim on your policy. This means that you could miss out on policy level discounts, such as an accident free discount.
Summary
- Before you loan your car to a friend, read your policy to confirm you have a permissive use policy. This would cover allowing someone else to borrow your car.
- Understand that when you let a friend borrow your car you are loaning out your car insurance too. So if your friend has an incident in your vehicle that causes damages to your vehicle or any other property, you would be responsible.
- Should an accident occur, you should be prepared for the insurance carrier to raise your rate.
You can read more about letting someone borrow your car here.