Is Car Insurance on the Car or the Driver?

At some point in time, someone is going to ask to borrow your car. Whether it’s a friend, a family member or a significant other, it can be hard to say no unless they have a legendary history of poor driving. Many vehicle owners don’t even think twice about lending out their cars as long as the person taking the keys is trustworthy. While helping out your friends or relatives is a nice gesture, you may be on the hook if the car is involved in a crash while being driven by someone else.

WILL MY INSURANCE BE AFFECTED IF I’M NOT DRIVING?

In most cases, a claim is a claim. An accident would cause a claim to be made against your insurance policy regardless of who was driving. Think of your auto insurance as insuring the car rather than the driver. Keep in mind that there are some exceptions that may determine the effect a crash has on your policy.

Most insurance policies extend coverage as long as the person driving the car has the permission of the owner. however, this is not always the case. Read your policy carefully to make sure that all damages from the accident are covered when the car is being borrowed. Keep in mind that if the accident is covered, your premiums may go up.

WHEN WILL PREMIUMS RISE?

Typically premiums go up if the person involved in the accident is found at fault. If they’re found at fault, coverage for injuries and damages will be filed against the insurance company covering the car they were driving. That means if you lend your car to your brother and he is involved in an accident, your policy may be charged for the damages he caused.

Fortunately, while your policy premium may go up you won’t have an at-fault accident listed on your driving history because you weren’t the person driving at the time of the accident. However, the claim will show up on your claims history, which can negatively affect future policies and cost you a no-claim discount if you have one.

WHAT IF IT’S NOT THE FAULT OF THE PERSON BORROWING THE CAR?

If the accident isn’t the fault of the person borrowing the car, the other party’s insurance will pay for injuries and damages. However, if the damage is more than the other driver’s policy allows for, you may need to file a claim under your own collision coverage which can also cost you a no-claim discount.

Every insurance company handles things differently. Carefully read your policy to determine who is covered while driving your car and how their actions can affect your insurance rates.

2018-09-16T13:14:44+00:00