Many people lend their vehicles to friends and family members they trust without giving it a second thought, but this decision can lead to major consequences without the right auto insurance coverage. Determining whether or not your auto insurance will cover a friend driving your car will vary from policy to policy. At the very minimum, the law requires you to purchase liability auto insurance coverage. Liability insurance would cover you from the expenses that you would be liable for in the event that you are involved in an auto accident that causes property damage or bodily injury to another party involved. Considering the high costs of medical care and legal fees if a lawsuit were to come of the accident, liability insurance can protect you from having to drain your savings for one accident.
Unlike collision coverage, liability insurance covers the driver and not the car. This means that if a person were to borrow your car, their own insurance policy would be responsible for covering the damages that occur as a result of an accident. Therefore, it wouldn’t be a significant risk for you to let someone borrow your car, as long as that person had some form of insurance on their own. Alternatively, a friend without a personal insurance policy would be solely responsible for any incurring damages while driving your car. Although this wouldn’t necessarily affect you, it is usually best to avoid this scenario.
Letting a friend borrow your car occasionally is one thing, but if you live with someone who frequently drives your vehicle, you should consider adding him or her to your policy to ensure full coverage in case of an accident. If this situation applies to you, it’s best to talk to your insurance agent about authorizing this person to drive your car by officially designating it on your insurance plan. Having this authorization would guarantee that you both would be fully covered in case an accident were to occur.