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If you drive your car and cause an accident, your car insurance will pay for at least some of the damages. But what happens if a friend or acquaintance drives and crashes your car?
To the surprise of many, your car insurance will be responsible for covering the damages.
“If you give another driver permission to use your car on a temporary basis, your own auto insurance policy will likely be responsible for damage to the vehicle or medical bills,” says Carole Walker, executive director of the Rocky Mountain Insurance Association.
And if you aren’t careful, it’s possible that you could be personally liable for the damages.
“Keep in mind, it will be your insurance — and by association, you personally — that will be responsible for covered damage and potential legal liability,” Walker says.
That means lending your car to friends can turn into an expensive favor if they get into a car accident.
What happens if someone else crashes your car?
Car insurance follows the car in most circumstances. What that means is if someone else drives and crashes your car, your insurance often will cover the damages, as long as they are covered by your policy.
But, there are times when your insurance coverage may not cover the damages. For example, if someone is regularly driving your car but you have not listed them on the policy, it’s possible that your insurer will reject the claim.
If that happens, you could be held personally liable for the damages. What ’permissive drivers‘ means
When you agree to let someone else drive your car, it is known as “permissive use.” Walker says insurers commonly offer permissive use coverage for situations where someone temporarily uses your car.
“This coverage provision extends insurance protection in that situation,” she says.
As a general rule, your insurer will cover the damages from an accident if you gave permission to someone to drive your car.
“Policy provisions often specify how often the vehicle can be driven — typically up to 12 trips –and have exclusions for household occupants or immediate family members,” Walker says.
However, there may be insurers who have different rules, so it is crucial that you speak with your insurance company to know exactly what is and isn’t covered before you let someone drive your car.
For example, if someone regularly drives your car or you are going on an extended road trip and sharing the driving duties with another driver, “you should consider adding them to your policy as a named driver,” Walker says.
“Non-permissive use” is a different matter. If someone – from a friend to a thief — takes your car and uses it without your permission, you and your insurance company likely will not be responsible for the damages resulting from an accident.
If someone crashes your car, who pays?
As long as you granted permission to someone to drive your car, your insurance company likely will cover any damages resulting from an accident in most situations.
Your liability insurance will cover damages caused to another car, a person or someone’s property.
If you have collision insurance, it will pay for the damages to your own vehicle if your friend crashes your car.
However, remember that insurance protection only goes as far as your coverage limits. So, if your friend is in a serious accident where someone is badly hurt – or even killed – you may be responsible for damages that greatly exceed your coverage limit.
What if your friend drives your car and causes an accident with minimal damage to only your car?
In almost all situations, if you loan your car to a friend and they damage it in an accident, your insurance will pay as long as you have collision coverage. Even if your friend has his or her own car insurance, the claim will be made under the collision portion of your policy.
This also means that you will be responsible for paying your deductible, and there is a possibility that your insurance rates will be headed up.
What if your insured friend drives your car and causes an accident with a lot of damage to others?
Let’s say the accident your friend causes results in property damage and serious bodily injury to others. In this case, your liability coverage kicks in.
Liability insurance will cover the damages your friend has inflicted on other people and their property, including their car. It also will offer protection if you are sued as a result of the accident.
Liability coverage is required in almost all states, but minimums vary dramatically. Just remember that if you carry only the minimum amount of coverage required by your state, it might not provide enough coverage to protect you if your friend causes serious damages.
If the damage exceeds your insurance liability limits, the courts can attach your personal assets, such as your home, to recover damages.
If your liability limits are not enough to cover all the damages inflicted on the other party, your friend’s auto policy may be looked at as secondary coverage.
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What happens if someone wrecks your car and they aren’t on your insurance?
Even if someone is not on your insurance, the damages should be covered as long as your policy limits are adequate and you carry the right type of insurance.
Even if someone else is driving the car, your insurance typically is the primary form of coverage.
However, things can get tricky if you regularly let someone drive your car but do not add them to your policy. In that case, it’s possible that your insurance company will refuse to pay the claim.
So, before letting someone regularly drive your car, talk to your insurance agent to make sure any accidents will be covered when that person is driving.
What if your friend drives your car without your permission and crashes it?
You probably won’t be held accountable for the damages because your friend borrowed your vehicle without your knowledge. In this case, your friend’s insurance — assuming they have it — will kick in first.
If your friend is uninsured, you’ll probably need to use your collision insurance to cover the damages to your own vehicle. Your liability insurance may cover damage to others’ property.
Bear in mind that insurance companies will assume a friend has permission to use your car unless there are clear indications that you denied permission, such as a drunken friend who drives away in your car without your knowledge or authorization.
QuickTake
Other scenarios that impact your coverage
Now that we’ve gone over common scenarios involving friends, let’s look at a couple that involves other drivers:
- Your car is stolen and then crashed: If the thief crashes into someone or something, you won’t be held responsible for the damages done to other people and their property, but you probably will have to use your comprehensive insurance to pay for the damage to your car.
- An excluded driver crashes your car: An excluded driver is a person – such as a teen in your home — specifically excluded on your insurance policy from driving your vehicles. Policyholders often exclude drivers to keep their premium down. Excluded drivers have zero coverage even if you give them permission to drive your vehicle. You will be on the hook for any damages.
Do car insurance rates go up after someone else crashes my car?
Usually, yes. Your insurance company doesn’t care if you are behind the wheel or a friend is driving.
“If you lend out your vehicle, there is a potential that an at-fault crash, moving violation or any insurance claim could impact your insurance premium or even renewal,” Walker says.
If you have accident forgiveness on your policy, you may get away without an increase if you meet the parameters of the program. Accident forgiveness can be a given as a perk to long-time customers with a clean driving record or as an add-on that you pay for once you are eligible.
The bottom line: Be careful about who you let drive your car
“While it may seem like “no big deal” to lend out your car, you are ultimately responsible for the insurance coverage if they cause a crash,” Walker says.
If the driver is unlicensed, it can keep your insurer from paying for accidents — and in some states, you may be cited by the police.
In addition to any legal problems, there can be serious costs to dealing with an accident.
Your auto policy follows your vehicle, so claims that arise from a friend wrecking your car will go on your policy and affect your future car insurance rates. Keep that in mind before handing over the keys to your car.
“Bottom line, be careful about who you lend your car to with the understanding you are also ‘lending’ your insurance coverage,” Walker says. If you’ve been paying higher rates after an accident your friend caused, it may be wise to compare top-rated auto insurance companies to see which ones might give you a lower rate.
