Whatever their need for it might be, lending your vehicle to one of your friends or family members can seem like a nice and simple gesture. But the thing about automotive accidents is that nobody ever plans on them, so there’s no telling when they might happen. What happens if you lend your car to someone and it gets in a crash while they’re behind the wheel? Who is responsible, and will your insurance cover the collision? That’s what we’re here to discuss today, so that you have all the information before agreeing to let someone else behind the wheel of your ride.
Insurance Follows the Car, Not the Driver
Here’s the good news — typically speaking, automotive insurance will follow the car rather than the driver. This means that even if you do let someone borrow your vehicle, as long as they have your permission, any accidents should be covered by your insurance policy. This is referred to as permissive use, which turns them into an “insured driver” under your policy as long as you gave them permission, either verbally or in writing. Your liability coverage will kick in first until your policy limits are hit, and if the damages exceed that figure then the borrower’s own insurance could potentially act as secondary coverage if they have it.
Vicarious Responsibility & Negligent Entrustment
In some states, you could be held legally responsible for the collision even if you weren’t in the car. A legal principle called vicarious liability holds vehicle owners accountable for the actions of drivers they’ve allowed to use their vehicle. Fortunately, Oklahoma is not one of those states, so as long as you remain here in the Tulsa area and the state as a whole, you shouldn’t have to worry about that.
However there are some situations where an owner can be held legally responsible for the actions of the person they loaned the vehicle, namely in employer–employee situations. Another example is if you were to loan the vehicle to an individual known to be incompetent or unfit, such as someone who is unlicensed, intoxicated or has a history of reckless driving. These events are referred to as negligent entrustment, and could leave you legally liable for any damages or injuries as a result of their driving your vehicle. Here are a few specific examples:
- You let your cousin drive your car even though he’s had multiple DUIs.
- Your roommate borrows your car while under the influence.
- A friend with no license takes your car and crashes it.
What If the Damages Exceed Your Coverage?
So, we’ve cleared up that your liability insurance will typically cover the costs of damages or injuries as a result of the collision, but what happens if the damages exceed your policy limits? As we mentioned earlier, if the borrowing driver has their own insurance it could cover the rest of the costs. However, if the driver doesn’t have insurance – or has insufficient coverage – you might still be held accountable. If this is a worry for you, you may want to consider adding uninsured/underinsured motorist coverage to your policy to ensure full protection.
Impact on Insurance Record
Okay, now you know just about everything you need to know about how insurance acts when you loan your vehicle to someone, but there’s still one major question out there. What kind of impact does this collision have on your insurance record? Even though the accident wasn’t your fault, it can still affect your insurance record. You’re still making the claim under your policy, so regardless of who was driving it can have negative consequences. Here are some of the potential results:
- A hit on your claims history
- Increased premiums
- Potential non-renewal of your policy
The last one is fairly extreme, but it is possible. So it’s important to always think at least twice before handing your keys over to someone. You want to make sure you really trust them and their abilities, as a single accident could have long-term financial consequences for you even if it wasn’t directly your fault. If you have questions, or would like to inquire about coverage, don’t hesitate to get in touch with us right here at Glover Family Independent Insurance. We look forward to hearing from you!