Before you let someone borrow your car, you should take into consideration the risks involved. It may seem like the nice thing to do if a friend is in need of a car, but make sure you know the laws in your state and your risk of liability before you let anyone take control of your vehicle. Here are some things you should know.
Insurance
In most states insurance coverage is on the car, not the driver. This means that if you let someone borrow your car and they get into an accident, it is your insurance that is on the hook to pay. If your car is in an accident even if you are not driving, your premiums could go up. If your liability limits are lower than the damages, then you are legally responsible for paying out any additional money.
Owner Liability
In some states such as Michigan, owner liability laws state that the owner of the vehicle is responsible for damages in an accident as long as the driver had your consent to drive the car. This means that if someone borrows your car, as long as they had your consent, you are liable for damages in the event of an accident. You could also be held responsible for the actions of the person who drove your car if they committed a crime.
Use Without Your Consent
It is important to note that the rules change if you have not given your consent for someone to drive your car. If you can prove that you didn’t give the other person permission to drive your car and they got into an accident, most likely their insurance will provide coverage. Keep in mind that in many states, family members are assumed to have consent unless it is specifically stated otherwise.
Before Lending Your Car
There are a few things you should do before you lend your car to someone. First, check with your insurance company to find out their policies and if there are any restrictions. Make sure your friend has a valid license, and check to see if they have any insurance. It is also important to make sure they have not been drinking or are under the influence.
Short Term Car Insurance
If someone will be driving your car on a regular basis, you can cover them for a short period of time. Contact your insurance company about adding them to your policy temporarily, or shop around for a company that offers temporary insurance. Just remember, it will cost extra to cover them, so you want to work out who is responsible for the payment.
Helping someone out by lending them your car is not always a bad idea, but you do want to make sure you are both aware of the risks and responsibilities. You also want to make sure you are lending it to someone who is responsible. Accidents happen even with responsible drivers, so think about it before you lend your car to anyone.
This photo, “Kia-” by laurencotie used under CC BY-NC-ND 2.o. “Kia-” is licensed under CC BY-NC-ND 2.0 by Gay Family Kia.
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