Your auto insurance policy is responsible for your car when someone else driving it is involved in an accident. A common myth is that if a friend borrowing your car has insurance, their policy covers any damage done to your car. That’s not the case.

If a friend borrows your car and causes an accident, your insurance policy pays for any at-fault damages. A rule of thumb to remember in this situation is “car insurance follows the car, not the driver.”

It’s still a good idea to make sure whoever drives your car has their own insurance policy, though. Their coverage can help pay for damage caused by an at-fault accident, in certain circumstances.

In this article, we answer some of the top questions related to what happens when someone not named on your car insurance policy borrows your vehicle and crashes it, including:

Yes, it’s legal to drive a borrowed vehicle if you don’t have your own car insurance. Remember, car insurance follows the car, not the driver. So, there’s no question of legality as long as the car you’re driving is insured.

If you’re going to drive someone else’s vehicle, make sure you know where its registration and car insurance card are before you get behind the wheel. If you’re pulled over for a ticket or get into an accident, you'll need both.

Will my insurance rates go up if someone borrows my car and crashes it?

Most insurance companies increase the car owner’s policy premium after an at-fault accident. This is because insurance companies base your insurance rates on the likelihood of a future claim.

Even though you weren’t driving your car when it was damaged in the accident, agreeing to loan it to someone who then crashed it makes you a higher risk to your insurer. This higher risk often translates into a higher car insurance premium.

Which type of car insurance covers the vehicles involved in an accident?

When an accident occurs, the vehicle whose driver was at fault for the crash is covered by its own car insurance policy. If the policy doesn’t include collision coverage, it won’t cover damages to the car. Also, the vehicle’s deductible will apply.

The vehicle owner and the at-fault driver will need to decide who pays the deductible. After all, regardless of who is responsible, the deductible must be paid.

Whose liability car insurance covers the driver when you loan out your car and it’s damaged in an accident?

First, you need to determine if the car’s insurance policy includes liability and collision coverage. Depending on the scale of the accident, the car's liability coverage may not be enough to pay for the resulting damages. If this happens and the driver has their own insurance, their policy will pay for the rest — assuming they have enough coverage.

If the driver of your car is uninsured and causes an accident, you could be liable for everything. For example, what if the uninsured driver causes a multiple-car pileup that exceeds the limits of your insurance policy? The injured parties could sue you for medical fees and property damages in excess of your coverage limits.

If someone else drives my car and gets a ticket, will it affect my car insurance rates?

Your car insurance won’t go up if you loan your vehicle to someone and they get a ticket or citation. Traffic violations go directly onto the license of the driver, not the license of the car’s owner. If the person who borrows your car has insurance, though, the incident might affect their rates.

Am I covered if I borrow my parents’ car once a week without being on their insurance?

Whether your parent’s car insurance covers you or not depends on:

  • Where you live
  • If you live with your parents
  • Their insurance provider

It can also depend on how many miles you drive per trip.

Most carriers will require your name to be added to your parents’ insurance policy if you live at home with them. Some states require it as well. Do the research and make the appropriate decision based on what you find out.

I borrowed a car and got a ticket for no insurance. Will I have to show proof of insurance for two years even if I don’t own a car?

This is a tricky situation. Borrowing and driving an uninsured car opens you up to legal problems because the ticket goes on your license. It won't affect the owner’s license. And why should it? They weren't driving. However, since you don’t own a car, there’s no need for your own auto insurance because you have nothing to insure.

However, if you plan to borrow other peoples’ cars often and those cars aren’t insured, talk to an insurance agent. There are special car insurance policies you might want to consider, like the “non-owner” policy. They’re uncommon and not every state allows them, but they’re also worth looking into if you frequently borrow cars.

Can I use my insurance if I borrowed a friend's car without permission and got into an accident?

You should definitely try to use your car insurance to cover any damage you caused. However, there’s a chance your policy won't cover it, as you didn’t have the owner's permission to drive their vehicle. 

A lot of what happens here depends on the state you live in and the details of your policy. In most states, a car's owner isn’t liable if they didn’t provide permission for the use of their vehicle. So, by borrowing the car without permission, you may be in big trouble. You’ve opened yourself up to liability, a lawsuit and a potential charge of being in possession of stolen property.

The first thing you should do in this situation is check with your insurer. If they deny your claim, you’ll have to pay for any needed repairs out of your pocket.

What do I need to know before lending out my car or borrowing someone else’s?

First of all, don't feel like you should never lend out your car or borrow someone else's. 

If you plan on letting other people borrow your car, make sure your vehicle registration and proof of insurance are in the glove box before they hit the road. Also, make sure everyone involved has their own auto insurance, if at all possible. That way, you’ll be as fully covered as possible should an accident happen.

On a related note, this is the perfect time to assess your policy. Do you have enough coverage to protect you if you lend out your vehicle or borrow someone else’s, or should you buy more? Do you have the right types of car insurance coverage for this situation? Talk with your agent if you have any questions or need any help.

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