Is Your Car Covered If You Lend It To Someone And They Wreck It?
Lending someone your car can be a good deed, but it sometimes is one you're punished for. Your friend or family member—whether their fault or someone else's—may end up crashing and wrecking the vehicle. You may think you can rely on your insurance or that they will be covered under another policy, but is that really the case?
Who Caused The Accident?
First, whether your friend or the other driver caused the accident needs to be determined. If the accident was not your friend's fault, the other driver's insurance policy should pay for the damages. However, it is up to the insurance companies to determine fault. The only exception is if the other driver admits to being at fault for the accident.
If your friend was at fault, it will be your friend who has to pay out. However, that doesn't necessarily mean that their policy will cover all the damage. Your policy is the primary one for the car, so you will need to pay out for damage and any injuries that have taken place.
When your insurance is maxed out, your friend's policy will then kick in to cover the difference. In this situation, all you can do is hope your friend's policy can pay the difference. Otherwise, the difference will have to come out of someone's pocket. What is covered by insurance and what is paid out of pocket is going to vary slightly depending on where you live.
How Was The Vehicle Being Used?
Whether or not a vehicle is covered – regardless of if you or someone you lent the vehicle to was driving it – sometimes depends on how the vehicle was being used. For example, if your friend borrowed the vehicle and then used it as a vehicle for business purposes, your policy may not pay out if the policy only covers personal and commuting usage. In this scenario, the only option would be to see if your friend has an insurance policy that would cover using someone else's vehicle for business purposes. Otherwise, you and your friend will have to pay for any expenses out of pocket.
The Answer Is Never Crystal Clear
The unfortunate truth is you have no choice but to be extremely careful with who you lend your vehicle to. Before handing over the keys, ask yourself if this is a person who will help you find the money to get the vehicle fixed if he/she crashes it and the insurance refuses to cover it. For obvious reasons, you should also avoid handing over your keys to someone who seems to be prone to getting into automobile accidents.