Lending your car doesn’t feel like a big deal, especially if it’s to a family member who just needs to run to the store. Maybe a friend’s car is in the repair shop, and you offer them your vehicle for a few days. Whatever the reason, car sharing is a common favor that many of us do for our loved ones without a second thought. However, it turns out that something as simple as running an errand can have serious consequences. Before you hand your keys over, it’s important to know exactly what you’re agreeing to.
You’re Still Responsible
Many insurance policies cover the vehicle rather than the person driving. You may wonder how that affects what happens if someone else is driving my car and gets in an accident. As an example, let’s say you lend your cousin my car for the day, and they have a minor crash. In that scenario, your policy will take the hit, not theirs. Aside from the hassle of making a claim, even the smallest accident can affect your premium. You might also need to pay upfront for repairs. You could even be denied coverage depending on your provider.
Some Policies Have Strict Limits
Not all car insurance policies work the same way. Some policies require you to provide full details of regular drivers, including their personal and license information. Others may cover drivers living in the same household. You might find that your insurance documents mention ‘permissive use’, which means other people can drive your vehicle as long as you give your permission. Even if that’s true, it’s best to double-check. Some policies have additional requirements for drivers, like age or years of driving experience. Even if you’re allowed to lend your car out, if the person borrowing it doesn’t meet the criteria, your insurance company can still reject a claim on your policy.
It’s Not Just About Crashes
Getting into an accident may be the worst-case scenario when lending someone your car, but it’s not the only risk you need to consider. If the driver is caught speeding, ignoring tolls, or causing another traffic violation, those tickets may turn up in the mail. Then there’s wear and tear: if your car comes back with a new sound coming from the engine or new warning lights, the repairs will likely come out of your pocket.
Make An Informed Decision
While lending your car can potentially become a problem, it doesn’t need to. There are plenty of situations where letting someone borrow your car makes perfect sense. If you know the person well and trust their driving, that’s a great start. Next, call your insurance; it doesn’t take long to check if they’ll be covered and find out what the specific risks are, depending on your policy.
Endnote
Helping someone out by lending them your car is a kind gesture that seems harmless. Most of the time, it is. Unfortunately, things can get complicated when an accident is involved. Make sure you understand the risks and the legalities around letting someone borrow your car before you agree to it. Otherwise, one small decision could end up costing you a lot more than you bargained for; not just for immediate repairs, but for years’ worth of insurance premiums, too.
