Jessica Fox Last Updated On: June 27, 2023

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Understanding Car Insurance Liability

What Happens When My Friend Crashes My Car

Accidents happen. But when your friend crashes your car, understanding the ins and outs of car insurance can be tricky. The good news is that most often, your car insurance will help cover the accident, to a certain extent.

The insurance follows the car first, as opposed to the driver, and you’re allowed to lend your vehicle to friends and family on occasion. There are exceptions to this, but it boils down to the fact that you should only lend your vehicle to those that are licensed, insured, and trustworthy.

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Permissive Driver

Under most car insurance policies, you’re allowed to let friends and family occasionally drive your car (usually up to 12 times per year). They would fall under “permissive driver”.

If they’re using your car more often than that, they should be added to your car insurance policy and your premiums would likely increase.

In some areas, insurance providers can actually lower the coverage for someone borrowing your car who isn’t on your car insurance policy; they could be covered for less than you are. When a permissive driver is using your vehicle, your insurance would be the primary insurance should anything happen, even if you’re not in the vehicle at the time and even if they have their own auto insurance. This is because you’re responsible for your vehicle, even if you’re not driving it.

The Coverage

When your friend crashes your car, your insurance pays out the damage according to your coverage and up to its limits. If the damage exceeds your limits, things become a little tricky.

Depending on the severity of the crash, you may be on the hook for liability coverage if anyone is injured in the crash. If your coverage limits aren’t high enough to cover the damage, your personal assets could be looked at to help recover damages.

Your friend’s car insurance could also be used to help pay for damages and liability; this combined coverage is called “pro-rata”. Your insurance would pay up to its limits and your friend’s insurance may pay the difference.

Uninsured Drivers

You should never let friends drive your vehicle if they’re uninsured. If they crash a car without insurance, your insurance is fully on the hook and you could personally have to pay for anything that your insurance doesn’t cover.

Letting an uninsured friend drive your car could put your personal assets at risk to cover potential medical bills and property damage.

If your friend doesn’t have a license and is uninsured, then your insurance may not cover anything at all should there be an accident. The reason is that you’re responsible for your vehicle and who you trust to drive it. If your friend crashes your car and was driving under the influence, then your insurance may not cover anything either.

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The Unexpected Costs of Lending a Friend Your Vehicle

It’s important to note that there can be significant unexpected costs if a friend borrowed your car and crashed it. If a deductible is required to cover the damage, you’ll be on the hook to pay it.

Your premiums could also go up as a result of the accident. If you don’t have collision coverage, you could also have to pay the repair costs yourself. What’s more, you may need to pay for a rental vehicle if your car is undrivable for any amount of time, if you don’t have loss of use coverage on your policy.

This is a lot. We get it. However, understanding the full financial implications of loaning a friend your vehicle is important for you both so a fully informed decision can be made.

Final Thoughts Lending a Friend Your Car

The repairs and damages from a car accident can add up quickly. Understanding what your insurance will and won’t cover will help you better decide when to avoid lending your vehicle to friends and family.

In the eyes of your insurance provider, your vehicle is your responsibility, even if you’re not driving it or in the vehicle. Make sure you are comfortable with the potential risks of lending out your vehicle because accidents can –and do–happen. That’s why insurance exists!

Jessica Fox Jessica Fox has been a freelance writer for five years, with a specialty in health, wellness, and insurance. During this time, she’s written for some of the biggest B2B and B2C brands from around the world. Jessica is also the mother of two young daughters and loves coffee, writing, and working out.

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