If you lend your car to a friend or family member, it might seem like a simple favor. But did you know that if they get into an accident, it’s your insurance that could take the hit? Many people aren’t aware of this important detail, so let’s break down what happens when someone else is behind the wheel of your car.
Understanding “Permissive Use”
When you let someone else drive your car with your permission, it’s called “permissive use.” In most cases, your auto insurance policy follows the car, not the driver. This means that if your friend or family member gets into an accident while driving your car, your insurance is likely to be the primary coverage that kicks in. This can affect your premiums and potentially your policy status, depending on the severity of the accident.
The Impact on Your Insurance If You Lend Your Car
If the person you lent your car to causes an accident, your insurance policy will be hit as though you caused the accident. This could lead to an increase in your insurance premiums, especially if a claim is filed. Your insurance history and claim record are factors that insurers consider when setting your rates, and an at-fault accident can have a lasting impact.
What About the Driver’s Insurance?
In some cases, the driver’s insurance may act as secondary coverage. This means it could cover costs that exceed your policy limits. However, this depends on the terms of both your insurance policy and the driver’s. It’s important to note that some insurance companies have exclusions or restrictions when it comes to permissive use, so you should check your policy details before handing over the keys.
What You Can Do to Protect Yourself If You Lend Your Car
- Check Your Policy: Review your auto insurance policy to understand how it handles permissive use. Make sure you’re aware of any restrictions or conditions that could apply.
- Limit Who You Lend Your Car To: Only lend your car to individuals you trust and who you know are responsible drivers. This minimizes the risk of an accident and, consequently, the potential impact on your insurance.
- Discuss Coverage with the Driver: If someone frequently borrows your car, consider adding them to your insurance policy as an additional driver. This ensures that your insurance company is aware of the situation and can adjust your coverage accordingly.
Final Thoughts
While it’s natural to want to help out a friend or family member, it’s crucial to understand the implications of lending your car. Your insurance policy could bear the brunt of any accidents that occur while someone else is driving your vehicle, potentially leading to higher premiums and more headaches down the road. By staying informed and taking the necessary precautions, you can protect both your car and your insurance policy from unexpected consequences.
Have more questions?
Holley Insurance is here to help! Call or text us at: (540) 334-4225 or email Service@HolleyInsurance.com
A little more about Holley Insurance…
Holley Insurance was founded in 2000, and retains a core base of loyal clients. We have locations in Roanoke, Rocky Mount, and Forest, VA. As an independent insurance agency, Holley Insurance represents a carefully selected group of financially strong, reputable insurance companies. Therefore, we are able to offer you the best coverage at the most competitive price. If you’re interested in starting a quote online or having us take a look at your current policies, click here!