Insuring Someone Else’s Car in Ontario

Strictly speaking, you can’t place insurance on another person’s car, at least not in a conventional sense. In most places in Canada, insurance is part of the ownership process. For example, in Ontario, insurance must be obtained before a driver can register ownership of a vehicle. This is typical of the process in other provinces. The better question might be to ask how you’re covered when you’re driving someone else’s car. In some cases, you need do nothing, while in others, arrangements are required.

Borrowing a Car

When you borrow a friend’s car to take a quick run to the grocery store, it’s not likely there would be a problem, even if an accident occurred. Incidental use of a car covered with conventional, personal insurance covers other drivers of the vehicle. However, both borrower and lender are making some large assumptions. If these assumptions are not in place, a quick run to the store could become an enduring nightmare.

Car and insurance are connected. When you lend one, you lend the other. The person borrowing the car must be legally permitted to drive in the province under which the vehicle is insured. In a worst-case scenario, an insurance company may not acknowledge a claim made if an unlicensed driver was operating the car at the time of an accident. That means the owner of the car would be responsible financially for both repairs to the vehicle and any liability settlement arising from the accident.

The borrowing driver usually assumes that the insurance card and ownership are in the vehicle, and that these are both valid. First of all, these documents must be produced at any traffic stop, regardless of who is driving. If either is not valid, the borrowing driver may have no insurance recourse after an incident.

A car can’t be lent on a regular basis to someone without adding them by name onto the car’s insurance policy. For example, if a neighbour uses your car every Wednesday to pick up your children who play together, this becomes regular use. If the neighbour is not named on the policy and regular use is discovered after an incident, the insurance policy may be invalid.

Insurance for Non-Owned Vehicles

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A borrower may have additional auto insurance protection under their own personal vehicle policies if there is non-owned vehicle coverage in place. Frequently thought of as “car rental coverage,” non-owned vehicle coverage does allow you to pass on high car rental damage waivers, but it will also cover you when you’re driving other vehicles, and it may extend to any named driver on your policy. You may be required to have both collision and comprehensive coverage before a non-owned vehicle endorsement can be added.

r their own personal vehicle policies if there is non-owned vehicle coverage in place. Frequently thought of as “car rental coverage,” non-owned vehicle coverage does allow you to pass on high car rental damage waivers, but it will also cover you when you’re driving other vehicles, and it may extend to any named driver on your policy. You may be required to have both collision and comprehensive coverage before a non-owned vehicle endorsement can be added.

Traffic Violations and Loaned Vehicles

The lender of a car is responsible for unpaid traffic tickets, since these are written against the car and not the driver. Moving violations are charged to the driver’s record, not the vehicle’s insurance, so, for example, a speeding ticket earned by the borrower will only affect the lender if the car is impounded, as with street racing violations.

2018-09-15T20:20:44+00:00