Does Your Insurance Company Cover Accidents in a Borrowed Car?

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We have all borrowed a friend’s car at some point. Maybe you had a quick errand to run, and your car was not readily available at the moment. Your friend’s car can come in handy at that moment.

However, there’s a downside to this car loan that you do not realize yet. Say you were to be involved in an accident on your way. Whether it’s minor or fatal, it would surely be different to handle than it would have been if the car was yours.

We’ll be giving you tips on how to navigate the challenges of driving someone else’s car. If you play your cards right, you’ll be able to scale out of the situation without paying anything out of your own pocket.

Does Insurance Cover the Car Itself or the Registered Driver?

Most people think car insurance covers the driver, but that’s not quite true. Car insurance actually follows the car, not the driver. This means the owner’s insurance is usually the first to be used in an accident, regardless of who’s driving.

In the United States, most states require car owners to have liability insurance. This covers injuries and property damage caused to others in an accident. Therefore, if you borrow a car with permission and get into an accident, the owner’s liability insurance will likely kick in first.

What Special Circumstances Apply?

There are a few situations where things might be different. For example, if you borrow a car without permission (like while joyriding), the owner’s insurance might not cover you. You could be personally liable for any damages.

Also, some policies might limit who can be covered under permissive use. For example, it might only extend to family members, not friends.

Furthermore, even if the owner’s insurance is primary, your own insurance might offer additional coverage. This could be helpful if the owner’s coverage limits are not enough.

What to Do If You Drove the Borrowed Car

Here’s what to do if you were behind the wheels of the borrowed car:

Inform the Car Owner

You have to be upfront with the car’s owner. Call them right away and explain the situation calmly. They’ll likely want to know the details of the accident and how everyone is doing.

Exchange Information

Just like in any accident, swap information with the other driver(s) involved. You could get their names, contact details, and insurance information. If you can, take pictures of their license plate and any visible damage to both vehicles with your phone.

Contact Your Insurance

Don’t forget, your own insurance company might be involved too. Give them a call and report the accident, even if you think the borrowed car’s insurance will be primary. This helps them stay informed and avoid any delays in case your policy needs to kick in.

What to Do If You Own the Borrowed Car

Here’s how to handle things if your car was the one involved in an accident while someone else was driving:

Cooperate with Your Insurance

Your insurance company will likely contact you to investigate the claim. Be honest and answer their questions truthfully. They’ll need details about the accident and the driver who was borrowing your car.

Check the Driver’s Coverage

Did the person you lent your car to have permission to drive it? Did they have a valid driver’s license? If they were excluded from your policy (like a friend with a history of reckless driving) or didn’t have permission, your coverage might be limited.

Understand How Much Coverage You Have

Let’s say the accident caused a lot of damage. If the driver at fault doesn’t have insurance or their coverage isn’t enough, your policy might offer secondary coverage, depending on your limits. It’s for this reason that you need to understand how much coverage you really have. 

No Matter the Situation, Hire a Lawyer

Whether you drove the borrowed car or happen to own it, you need a lawyer to help you handle the legal aspects of the process, especially compensation and settlement.

You might need legal help to understand the complicated aspects of your policy limits. Or, you might need legal representation to fight the case in court if the negotiation process doesn’t yield any satisfactory outcome. Hire a lawyer as soon as the accident occurs. This way, you’ll have solid representation, come what may.

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