An insured car is loaned to an individual who doesn’t own a car and thus does not have insurance, what happens if that individual has an accident?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jun 22, 2012

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Insurance Question from USAF Academy, CO

Asked on 06/22/2012

An insured car is loaned to an individual who doesn’t own a car and thus does not have insurance, what happens if that individual has an accident? The car was parked and was side swiped by another vehicle while the individual who borrowed the car was away from the vehicle. The individual does not own a vehicle and does not have auto insurance. What is the correct course of action?

Answer given on June 23, 2012

In auto insurance when there is an accident, the insurance follows the car. This is the case even if the car is parked or driven by someone who does not own a car.If the driver who caused the accident is known, then their insurance will pay for the damages to your car. However, if it was a hit and run incident, then the owner of the car will have to file a claim under their collision insurance and any damage will be paid, less the collision deductible.Since the car was parked, there will be no effect on your auto insurance rates. The accident was not your fault, or the fault of the driver. You may need to file a police report for the incident. Call your insurance agent or company and file the claim. Then ask what they want you to do regarding a police report. The adjuster should be able to walk you through what needs to be done.

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