Things to know before you say, “Sure, here are my keys!”
Holidays are a busy time. Our homes are full of people and plans. Realistically it may happen that the family car is needed by someone other than you:
You are having a baking session with your friends and there is no more flour. Your friend volunteers to go to the store as your hands are in the batter.
Your college student comes home for winter break and needs your car to hang out with friends.
You have guests who fly in for a week-long visit, and you want to lend them your car for added convenience.
Without a second thought, you pass along the keys.
Your response to these scenarios is goodhearted, but unknowingly you may be putting yourself, your good driving record, your vehicle, and insurance premium into jeopardy.
So the question remains – “Should I let you borrow my car?”
Before you even hand over your keys, consider the following:
- Consult your independent insurance agent regarding the specifics of your policy. The agent will let you know your coverage and advise you of any coverage gaps for your various situations.
- Make sure the individual has a valid license. This point seems obvious but do you really want to be surprised if this isn’t the case? Also, know the person’s driving habits. Are you ready to accept the risk of their erratic driving behavior?
- Verify that the person has auto insurance.
- Verify that your registration and insurance information are in the glove box. The paperwork on your insurance phone app won’t help your friend if you aren’t in the vehicle.
Now let’s look into our three scenarios:
Lending your car to friend to run an errand.
Generally, insurance coverage follows the vehicle. Meaning that if the driver gives permission to use the vehicle, the owner’s policy will provide coverage to the driver. In the case of a car accident, your insurance will cover the damage. If the car accident is so severe that your insurance can’t cover all the damages, then the friend’s policy would cover the rest of the liability.
If you do not give explicate permission for your friend to use your car, then most states say the liability rests with your friend. Check with your agent to verify the rules for your state.
College student comes home for vacation.
If your college student isn’t already listed on your auto policy, then add them for as long as they are back at home. Some insurers consider a habitual, or occasional, borrower to be the same as a regular user of the vehicle. If the person is deemed a regular user and not listed on your policy, you may be denied coverage in the case of an accident.
Another point to consider for your non car owning student is to get them a “non-owner’s policy” or a “broad policy” while they are in school. The potential exists at school for your student to borrow a car from a friend. This “non-owner’s policy” insures the driver and not the car. It gives your student driver coverage in case the owner’s insurance is inadequate. Not all states allow this coverage, so speak with your agent concerning details for your student’s state.
Guests borrow your car during a visit.
Depending on the length of stay, your guests may be considered habitual borrowers of your vehicle, similar as a college student coming home for break. This means that your policy will cover you and your occasional borrowers – as long as they are listed on your policy. So get your guest’s information before their arrival to ensure fluid use of your car.
In case your guest gets a traffic violation, or any other citation while driving your car, that will go directly to the license of the driver. You are not held responsible for this behavior.
As you can see, there is much to consider before entrusting someone with your car.
What do you think? You still ready to hand over your keys?
The above article is meant to give a general overview of insurance policies; exact coverage and terminology could vary by insurance company. Please refer to your policy for exact coverage details and terminology.