What happens if someone else crashes your car?
Your sister’s car is in the shop. You have too many margaritas at happy hour and want to let your sober friend drive home. Your neighbor asks if he can run a quick errand around town. There are many situations when letting someone borrow your car makes sense.
But what happens if they get into a wreck in your car? Or you’re borrowing a car and have an accident? Does the driver’s insurance kick in or does the burden fall on the car owner’s coverage? And can you get in trouble for borrowing a car and then getting into an accident?
Here’s a look at what happens if you or someone else crashes a borrowed car, and how to ensure you’re always financially protected behind the wheel of someone else’s vehicle.
What happens if someone else crashes your car?
Letting someone borrow your car can be nerve-wracking. Not only are you letting the driver take your high-value item around town, but also your car insurance policy comes into play too. Under the concept of "permissive use," if you give permission for a valid driver to borrow your vehicle, your policy still covers your car.
But there are some key nuances.
If someone else borrows and wrecks your car, but they are not at fault, the other driver’s liability coverage will cover the property damage and bodily injury. If the at-fault driver doesn’t have enough coverage, your policy’s uninsured/underinsured motorist protection may be necessary to cover the difference.
If you lend your car to someone who is at-fault in an accident, though, your own auto insurance coverage will apply. Any property damage or injuries that occur as a result of the accident will be covered by your insurance company, up to your policy’s maximum coverage limits.
It’s important to read the fine print of your policy documents, to ensure that you understand your carrier’s permissive use policies and exactly what they cover.
Who pays the deductible?
If you have full coverage (such as collision protection) when a friend or family member wrecks your car, it will pay to repair or replace your vehicle according to the policy’s coverage limits. If you’re the at-fault party, you will still be responsible for paying any applicable deductible for the repairs, though.
So, who actually pays the deductible, if you weren’t technically driving your car in the first place? Well, this is where things get a bit gray.
In most cases, you and your friend will need to talk to decide who needs to pay. If your friend refuses, or can’t afford the deductible, you may have to foot the bill in order to get your car repaired. Your carrier may choose to go after your friend’s auto insurance policy for costs that exceed your policy limits, but they don’t typically recover your deductible for you.
Read more: What you need to know about car insurance deductibles
What if you don’t have enough coverage?
If your liability from an at-fault accident exceeds your policy limits — even if a friend was driving — you may find yourself in a sticky situation.
First, the borrower’s own insurance coverage may be tapped to provide secondary coverage, depending on your state and the specifics of the accident. If you have an umbrella policy or other personal liability policy, that coverage may also be utilized to cover the not-at-fault driver’s damages.
If your coverage still isn’t enough, you could be personally liable for the expenses beyond your policy limits.
Will your insurance cover someone not on your policy?
If you let someone borrow your car and that person gets into an accident, your carrier will usually cover the loss even if that individual wasn’t on your policy. There are a few exceptions, though:
If there wasn’t permissive use: Your carrier may deny claims following an accident if someone borrowed your vehicle without your explicit permission.
If the driver wasn’t legally licensed or was impaired: As the owner of the vehicle, it’s your responsibility not to lend it to someone without a driver’s license, whose license is suspended, or someone who is obviously impaired. If you do lend your vehicle to a reckless or illegal driver, your carrier may deny a resulting claim. So it may seem obvious, but you should think twice about handing your keys to anyone with a history of speeding tickets, drunk driving, DUIs or other black marks on their driving record.
If the driver was listed as a named exclusion — You can add people to your policy as excluded drivers, meaning that you are explicitly excluding them from the policy’s coverage. If that person then drives your vehicle and gets in an accident, your carrier will not extend coverage.
If there wasn’t permissive use: Your carrier may deny claims following an accident if someone borrowed your vehicle without your explicit permission.
If the driver wasn’t legally licensed or was impaired: As the owner of the vehicle, it’s your responsibility not to lend it to someone without a driver’s license, whose license is suspended, or someone who is obviously impaired. If you do lend your vehicle to a reckless or illegal driver, your carrier may deny a resulting claim. So it may seem obvious, but you should think twice about handing your keys to anyone with a history of speeding tickets, drunk driving, DUIs or other black marks on their driving record.
If the driver was listed as a named exclusion — You can add people to your policy as excluded drivers, meaning that you are explicitly excluding them from the policy’s coverage. If that person then drives your vehicle and gets in an accident, your carrier will not extend coverage.
If someone will be borrowing your vehicle regularly, you may want to add them as an authorized driver to your policy. This will ensure that they are always protected when using your car, and you never have to worry about whether or not coverage is provided.
Read more: How to figure out the coverage you need and find the cheapest car insurance
What happens if you wreck a borrowed car?
In general, car insurance follows the car, not the driver. So, as long as you borrowed a car that has active and valid insurance coverage, you should be protected if you get in an accident. In most situations, primary coverage would be the policy of the car owner, not the driver.
If you’re at fault for wrecking a borrowed car, the vehicle owner’s insurance should provide liability coverage to the not-at-fault driver and also pay to fix the borrowed vehicle if collision and/or comprehensive coverage was added.
If you aren’t at fault for a wreck in a borrowed vehicle, the at-fault driver’s liability coverage should cover the damage.
Depending on your state and the details of the car accident, there is a chance that your own auto insurance policy may be required to provide secondary coverage if you’re found at-fault for wrecking a borrowed car.
This typically only occurs if the vehicle owner doesn’t have sufficient coverage. In this case, your own coverage may be called on to cover damages that exceed the owner’s policy limits. If you’re injured in the accident, your policy can also provide you with personal injury protection (PIP) and medical payments (Medpay) coverage in some cases, even if you’re driving a borrowed car.
Vehicle owners are allowed to lend out their car on occasion without penalty, as long as the driver they’re lending the vehicle to has a legal driver’s license and there’s no reason to believe they will be reckless. However, if you are regularly borrowing a car from someone — such as sharing a family vehicle or driving your partner’s car on a daily basis — you may need to be added to their policy as an authorized driver.
Permissive use is typically reserved for occasional drivers. Many carriers will require customers to add other drivers who live in the home, adult children or acquaintances who frequently drive the vehicle. If you wreck a borrowed vehicle and it’s discovered that you borrow that car all the time but are not added to the policy, the insurance carrier could potentially push back on the claim.
If you don’t own your own car, you may think that you don’t need insurance coverage. However, if you regularly drive other people’s vehicles, you should seriously consider buying a non-owner auto insurance policy.
Non-owner car insurance provides you with liability coverage anytime you get behind the wheel of someone else’s car. It doesn’t include comprehensive or collision coverage — so any vehicle you borrow wouldn’t be covered by this policy — but is typically more affordable than a standard policy.
Depending on the carrier, you may also be able to add PIP, Medpay, and/or uninsured/underinsured motorist coverage to protect you if you’re injured in an accident.
