Most people have an idea of what is and isn’t covered by their various policies. But at Point Insurance we get a lot of questions about borrowing or lending a car.
You might be thinking of borrowing your neighbor’s truck for a renovation project or a trip to the local dump; we thought it was a good opportunity to provide a little more information.
Generally, insurance coverage follows the vehicle rather than the driver. So in most cases, as long as the car owner has insurance, it will be covered even if someone other than the owner is driving it – as long as they have the owner’s permission.
The borrower̵7;s insurance is considered secondary, which means that in the event of an accident it can apply if the owner’s insurance is not sufficient to cover the damage completely.
It is important to note that there are some exceptions to what is called “fair use” coverage. Permission must, for example, be given by the owner unless the borrower has a reasonable belief that they may use the car. However, the borrower cannot allow anyone else. So if your teen allows one of their friends to drive your car to Gillette Stadium, your coverage likely won’t apply.
Coverage may also be denied if the borrower uses the vehicle negligently or criminally. And if the borrower is using your car for business purposes, your personal auto policy likely won’t cover it.
If you have a regular long-term arrangement to either borrow or lend a car, the borrower should probably be added to the owner’s personal car policy. Those who don’t own a car but often borrow one can consider “named non-owner coverage,” an endorsement that provides liability for bodily injury and property damage, uninsured motorist coverage and more.
In the end, it’s usually safe to lend your friend your car for occasional errands or projects. And the same applies to borrowing a car. Just make sure it’s for “normal” use. You want to confirm that the car has coverage and that your insurance, regardless of whether you are the owner or the borrower, will apply.
Feel free to call us if you have any questions; you don’t want to wait until after an accident to get answers!