Does car insurance cover accidents when you lend your car?

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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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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 14, 2021

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  • Car insurance companies refer to people you’ve let borrow your car as “permissive drivers.”
  • If a permissive driver gets into an accident in your car, it will be your car insurance that covers the damage to your vehicle.
  • As long as your insurance coverage is up to date and you have safely maintained your vehicle, your car insurance should cover a borrowed car accident.

Does car insurance cover accidents when you lend your car? What happens if someone borrows your car and gets in an accident? What car insurance policy covers after an accident is often going to depend on whether it was reasonable to let the other driver use your car. 

Car insurance follows the vehicle, not the person. So when it comes to borrowing a car, it will be the car owner’s insurance that will typically have to pay. 

Letting someone borrow your car means you’re giving them “permissive use” of your vehicle. Car insurance companies will refer to them as “permissive drivers.” Permissive drivers are covered by your car insurance up to a point, and it will fall on you to pay the remaining balance if there is one.

You can avoid paying more than you have to by adding people to your insurance policy, or you can create a named driver policy to cover only the people who borrow your car the most.

If this seems confusing at first, don’t worry. We’ve put together this guide to help you better understand whether or not car insurance covers accidents when a car is lent and what kinds of car insurance policies will cover permissive drivers. 

Keep reading to learn more. If you or a permissive driver were in an accident in your vehicle, get in touch with a local car accident attorney by entering your ZIP code into our search tool.

Can someone drive my car and be covered by my insurance?

The easy answer is yes. If you give someone permission to drive your car, your car insurance policy will cover any damages should they get into an accident up to your coverage limits. But depending on where you live, you may not get the full coverage from your insurance policy. 

Insurance companies in certain states can decrease your coverage levels if it’s not you behind the wheel. The following eight states are legally allowed to reduce your insurance coverage for permissive drivers:

  • California
  • Colorado
  • Michigan
  • Missouri
  • Ohio
  • Oklahoma
  • Pennsylvania
  • Washington

If you live in any of these states, your car insurance provider can reduce your coverage down to the minimum required by the state. You would then be responsible for any additional costs.

Can someone not on your insurance drive your car?

Yes. When you give permission to a friend, family member, or roommate to drive your car, they become a “permissive driver.” 

Most standard insurance policies are permissive use policies that allow other people to drive your car with your permission, even if they aren’t explicitly on your insurance. This video explains how insurance works when borrowing a car:

On average, permissive drivers are covered by your car insurance as long as they don’t drive your car more than 12 times in a 12-month period. This time limit can vary by state and insurance policy, so get in touch with an insurance agent if you’re unsure. 

If a driver does not have permission to drive your car, that could be considered theft. And if someone steals your car and gets into an accident, you won’t be held liable for injuries caused by that driver. Your insurance policy will be used to cover the damage to your car, however.

What about an uninsured driver driving an insured car?

Letting an uninsured driver borrow your car is risky. Usually, when damages exceed the limits of your car insurance coverage, then the permissive driver’s insurance can be looked at as secondary coverage, especially when it comes to liability insurance. 

If they are uninsured, you’ll be on the hook for any and all personal injury and property damages caused by the accident. 

You could also be sued for damages and injuries if the permissive driver was found at fault for the accident and your insurance doesn’t cover the damage done to any other driver or property.

Types of Insurance for Borrowed Cars

If you’re letting someone borrow your car on a regular basis, you should consider adding them to your insurance policy. This can increase your premiums, but it will give you the coverage you need in case the driver gets into an accident in your car.

You can also encourage your friend to sign up for non-owner car insurance. We recommend non-owner car insurance for drivers who borrow or rent cars often. It should be noted that non-owner car insurance is liability insurance only and will not cover damage to the driver’s vehicle. 

Watch this video for more information on non-owner car insurance:

You may also consider a named driver insurance policy. With this type of auto insurance, each driver is explicitly listed on the policy. Insurance coverage will only apply to those people listed on the policy, no matter who may have permission to drive the car. 

Can I drive my parents’ car if I’m not on the insurance?

If you have permission from your parents, and they know you are borrowing their car, then you will be covered as a permissive driver. Teens borrowing a parent’s car will also be covered by the parents’ car insurance.

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What if you didn’t or shouldn’t have let someone borrow your car?

In many cases, when you lend someone else your vehicle, your insurance will cover any accident that occurs when that person was driving. However, in these cases, your insurance will only cover the car accident if the person took your vehicle with your permission and if it was reasonable of you to grant that permission.

If it is considered negligent for you to have loaned your vehicle to your friend, your insurer may refuse to assume responsibility for paying the bills — this is known as owner’s negligence. For example, if your friend did not have a valid driver’s license and you lent her your car anyway, or if your friend was under the influence of alcohol and you knew this when handing her the keys, your insurance company is likely to deny coverage.

If someone is driving my car and gets in an accident, who is responsible?

As the car owner, your insurance policy will cover any damage caused in the accident unless the car was stolen.

Coverage is limited by the kind of car insurance you have, and you’ll be responsible for any payments not covered by your insurance. 

If you don’t have car insurance, you’ll be responsible for the damages out of pocket.

What happens if a friend wrecked my car?

If your friend is found at-fault for the accident, your car insurance will cover the damages. If the other driver is at-fault, then their insurance will cover the damages. If you live in a no-fault state, then your car insurance will be responsible for covering the damage to your vehicle.

Remember that if your friend is at fault, your insurance will only pay for damages to your vehicle if you have auto collision insurance — liability insurance only covers damages and injuries for the driver who was not at fault.

A friend crashed my car and won’t pay — what do I do?

Even though they were driving, it’s not their insurance policy that will cover the damages. As the owner of the vehicle, it will be your insurance company that’s responsible for the costs. 

What if your friend crashes your car? You can ask your friend to reimburse you for the damages. Get an auto insurance quote for the damage from your insurance provider or from the body shop, and present the receipts to your friend. If they refuse to pay, you can sue them for the cost of repairs. 

Not everyone feels comfortable suing their friends. To avoid litigation, try sending a letter of demand to your friend, requesting the full sum or terms for a repayment schedule. If they don’t respond to this, hire an auto insurance lawyer who can help you get what you need.

Does insurance cover accidents when a car is lent?

As long as your insurance coverage is up to date and you have safely maintained your vehicle, your car insurance should cover a borrowed car accident. According to the Car Care Council, you need to maintain your car, especially when you aren’t driving. 

If you aren’t maintaining your vehicle, you could be sued for damages and injuries if an accident is caused by your vehicle’s malfunction.

A borrowed car accident with no insurance is another story. If your friend is uninsured, and the damage or injuries exceed the limits of your current car insurance policy, then you could be responsible for any extra costs.

Responsibility for loaning your car to a friend is a complicated question and there is no one answer to whether you’ll have to pay the bills from a car accident in this situation. No matter what, though, it is important to report any accidents involving your car to your insurance company, whether you were driving or not.

To begin your search for an experienced auto accident attorney near you, enter your ZIP code into our search tool below.



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