When you loan your car to a friend or family member, there is a risk that he or she could get into a car accident. If it does happen, it is important to know whether you may be held liable for damages. There are multiple factors that may affect liability and the amount paid out to cover damages.
Sigman Janssen discusses these factors in further detail below and what you should be aware of if you decide to lend your car out. We have helped many accident victims pursue maximum compensation and recovered millions for our clients. This includes a recovery of $2 million for a young adult injured in a highway accident. An initial consultation with a member of our legal team is free and confidential.
Insurance Follows the Car, Not the Driver
When lending someone your car, you are also lending him or her your auto insurance. This is because most insurance policies follow the car, not the driver.
In the event of an accident, your auto insurance would act as primary coverage. This is true even if the driver has insurance. If you let a friend borrow your car and he or she causes an accident, your auto insurer would be responsible for paying for damages to the other driver and his or her passengers, up to the limits of your policy. If damages exceed your policy limits, your friend’s insurance would act as secondary coverage.
If your friend is not to blame for the accident, the other driver’s insurance would be expected to pay for any damages caused. This is the standard procedure in at-fault insurance states.
Auto Insurance Coverage and Permissive Use
Generally, anyone living in your household will be covered by your auto insurance. This could also include anyone who borrows your car, provided you gave him or her permission. This is in accordance with state law. Permissive use means giving a friend or family member consent to drive your car. In some instances, an adult resident of your household can give him or herself permission to operate your vehicle and be covered by your insurance.
If you lend your car to a friend, roommate or neighbor, or someone not listed on your policy, they would be covered if they were driving your car periodically and not on a regular basis. Otherwise, that individual should be added to your policy.
That is why it is important to know what is included in your policy and your liability if you lend your car to someone. If you are still not sure about the terms of your policy after an accident, it is best to speak with an experienced lawyer who can review your auto insurance coverage and discuss your options.
What If My Car Was Taken Without Consent?
This would be deemed non-permissive use. It can be challenging to prove that you did not give a friend or family member consent to use your car. Unless there are clear indications that you denied permission, the insurance company will assume that you gave permission.
In some cases, you may not be responsible for damages if your car was stolen and involved in an accident, someone borrowed your car without permission and caused an accident, or you excluded someone in your household from coverage under your policy and he or she takes your car regardless.
Protecting Yourself When Lending Out Your Car
It is always a risk to lend your car to someone else, but there are things that can be done to protect yourself. Use extra caution and make sure that the individual who borrows your car has a valid driver’s license and understands his or her responsibilities while on the road.
Trusting someone with your car is also important. If you know that a friend or family member can be reckless or unsafe on the road as a driver, you may want to think twice before handing over your keys. If you negligently entrust a person with your vehicle (they are an unlicensed or inexperienced driver or under the influence of drugs or alcohol, you can be personally liable for that negligent entrustment.
You should also make sure to have a copy of your vehicle registration and insurance information in the glove box and let the individual who is driving your car know where it is located.
Reach Out to Our Firm Anytime, Day or Night
Our licensed Green Bay car accident lawyers are available to provide answers to your legal questions. This includes discussing your options if you loaned your car to someone and they cause an accident. We are prepared to determine whether you have a valid claim in a free, no-obligation consultation.
Should we represent you, there are no upfront fees to get started and no fees while we work on your case. We only get paid for our legal services if we help obtain compensation on your behalf.
Sigman Janssen. Free Case Reviews. (877) 888-5201.