What Happens if You Loan Your Car to Someone, and They Get into a Crash?

woman-hands-key-overThere are many reasons why you may lend your car to a friend or a family member. However, you should be aware that lending your car to someone may affect your liability if they are involved in an accident.

It is important to know that your car insurance policy is attached to the vehicle, not the driver. This means your auto insurance policy is the primary source of coverage when you let someone else borrow your car. The borrower’s insurance would be considered secondary coverage.

If you are unsure about insurance coverage that may apply after an auto accident, contact an experienced Sacramento car accident lawyer at the Arnold Law Firm for a no-cost evaluation of your situation. Our firm has been helping crash victims in California for over 40 years. We work on contingency – which means you will not be charged any attorney fees unless we secure compensation on your behalf.

What Are the Rules in California?

In California, vehicle owners are generally responsible for damages if they allow friends or relatives to borrow their vehicle. However, there can be exceptions for:

  • Excluded drivers - If the person who crashed your vehicle was excluded from coverage in your insurance policy, your policy likely will not apply. That means it will not cover damages the excluded driver causes. Whether you are liable for damages depends on the situation and should be discussed with a licensed attorney.
  • Unlicensed/incompetent drivers – If you loan your vehicle to someone who is known to be unlicensed, incompetent or has shown an irresponsible past, it is unlikely your insurance policy will provide coverage. However, as the owner of the vehicle, you could be sued for negligence by the other party involved in the crash.
  • Non-permissive use – This means someone borrowed your vehicle without your permission. Since it can be difficult to prove whether you granted permission, you may still be responsible for covering the damages. However, you may not be liable if your vehicle was stolen, an uninsured friend drove your car without your permission, or a family member borrowed the vehicle without your permission.

If you knowingly let an impaired person (intoxicated, under the influence of drugs or had a history of driving while impaired) drive your vehicle, you could hold some liability if they cause a collision. You could also be liable if you were aware, or should have been aware, of a defect with your vehicle that caused an accident.

How Are Family Members Covered by Insurance?

If you allow a family member to borrow your vehicle, he or she would likely be covered under your insurance policy. Any passengers injured in the accident would likely be covered by your insurance policy as well. If the accident was the borrower’s fault, your insurance should cover damages suffered by those in the other vehicle.

If a family member who lives in your household is going to be driving your vehicle, it is important to add him or her to your auto insurance policy as an additional driver. If the relative does not live in your household and is going to be driving on a regular basis, it may also be a good idea to add him or her to the policy. If your family member does not live with you and will only be driving your vehicle occasionally, it may not be necessary to add this person to your policy.

Speak to a Licensed Lawyer About Your Situation

If you are having trouble recovering compensation from an insurance company, contact the Arnold Law Firm at (916) 777-7777. There is no fee or obligation for an initial consultation, and we don’t get paid unless we obtain compensation for your claim.

Call (916) 777-7777 today or fill out a Free Case Evaluation form.