My Friend Wants to Borrow my Car. Am I Covered?

Car Insurance
March 24, 2021
woman in car taking car keys from another person

Letting friends borrow your car opens up many different questions about insurance and liability. So, are you covered if your friend wants to borrow your car? Keep reading to discover the answer!

Am I Covered If They Borrow My Car?

Let’s cut right to the chase. Are you covered if a friend borrows your car? Most of the time, the answer is “yes.” But you need to be very aware of what “covered” means in this case.

That’s because most drivers make a big assumption about loaning out their car. Specifically, these drivers assume that when they loan their car to someone, that person’s insurance will pay for damages in the event of an accident.

Simply put, the insurance policy is tied to the car and the “named driver” on record. So while you can grant permission for someone else to use your vehicle, it is your own insurance policy that will be used to cover damage sustained in an accident.

Frequency Matters

Here’s an open secret about the word “borrow.” It has very different meanings for different people!

For example, maybe your buddy asks to borrow your car one day to run a quick errand. In that case, you are likely fine simply relying on your own personal car insurance in case any accidents happen.

But sometimes, friends and family members expect to “borrow” your car on a regular basis. At that point, they aren’t simply borrowers: they are now part-time drivers of your vehicle.

If that happens, you may need to cut them off “cold turkey” from driving your car to protect your insurance and finances. Plus, with the situation of your son and daughter “borrowing” the car regularly, you are better off simply adding them to your existing policy for maximum protection.

Your Coverage: The Double-Edged Sword

On paper, the fact that your friend will be covered under your insurance sounds good. Everyone wins…right? But in certain circumstances, a combination of insurance policies and local laws might leave you holding the bag if something goes wrong.

Let’s say your friend borrows your car and causes an accident. In the short-term, your insurance will help take care of things. But in the long-term, someone causing accidents in your car and relying on your insurance policy may cause your insurance rates to go up.

That can happen in the case of even mild “fender benders.” But if the accident is much worse, you may face harsher consequences.

What if you let someone borrow your car, and they cause a lot of damage while driving? In that case, you may be liable to pay for any damages that are caused above and beyond what your insurance policy will pay out. Even worse, you could even be sued by someone who was hurt or otherwise affected by the damage.

While all of this sounds scary, it doesn’t mean you should never loan your car to a friend. However, you should be very honest with yourself about whether this person will be able to safely drive your vehicle and bring it back to you in one piece.

Are They a Good Driver?

smiling woman and man in borrowed car

So, your friend just hit you with those scary five words: “can I borrow your car?” Now, it’s time for you to ask your own five-word question: “are they a good driver?”

It’s not the end of the world if your friend has had the occasional accident that wasn’t his fault. But if he has a history of causing accidents (or just driving into every pothole on the road), then you need to find a polite way to decline their request.

And while this should go without saying, make sure you never loan your car to someone under the influence of drugs or alcohol. In that state, they are far likelier to cause an accident. And in addition to such an accident putting their life in danger, you may be liable for any damage that they cause through their negligence.

What Do They Need the Car For?

So far, we have focused on a scenario where your friend wants your car to help them get from “Point A” to “Point B.” But if your friend has other plans, this can affect your decision to loan them your car.

That’s because your standard consumer auto insurance can provide protection for your friends driving around for their own purposes. But if they are going to use your car for commercial purposes, they may need to take out their own commercial insurance policy.

What kinds of commercial purposes would a friend need your car for? If they work for a restaurant, they may want your car to help deliver food.

Or someone who works part-time for Uber or Lyft may want your car to help them complete ridesharing jobs. In some cases, it may just be that your friend wants to borrow your larger vehicle (such as a truck or an SUV) to help them haul some important supplies to their employer.

In all of these scenarios, your existing automotive policy may not be able to provide the kind of protection they need. If you’re not sure, don’t rush into a decision. Instead, take the time to contact your insurance carrier and get answers to your most important questions.

Your Next Move

Now you know whether you should let your friend borrow your car or not. But do you know where you can find the level of insurance coverage you really need?

Vern Fonk has the information and services you both need and deserve. To discover the difference Vern Fonk can make, find the nearest office and visit us today!