Your Liability When You Lend Your Car to Someone

Is it bad to let someone else drive your car?
Not necessarily. However, there are certain things you need to consider before handing over your keys to someone who wishes to borrow it.
It might sound grim, but you should always consider potential consequences so that you can take proper precautions and safety measures accordingly.
For example, if a person gets into an accident while driving someone else’s car, does insurance cover the cost of repair? As car accident lawyers would tell you, these things tend to be a bit more complicated, especially when insurance is involved.Remember that before lending your car to a friend or relative, it’s always prudent to ask the other person a few questions to ensure that you are protected, insurance-wise. After all, you, as a car owner, have legal responsibilities. Hence, the person borrowing your car should also be made aware of their accountability when borrowing personal property, such as a car.So, if you’ve lent your car to others a couple of times and have wondered, ‘What happens if someone drives my car and gets into an accident?’ Don’t worry. You’re not alone, and we’ve got just the right guide for you to ensure that you and your friends or family are protected.

The Insurance Goes Along with The Vehicle.
If you haven’t given much thought to what happens with insurance when someone borrows your car, here’s a rule of thumb: You and your insurance are responsible for any damages or liabilities caused by the borrower.That’s right. Insurance goes with your vehicle, not with you. As such, getting in an accident in someone else’s car affects the lender’s driving record and may raise their insurance premium.
By principle, when you lend your car to someone, you’re also lending them your insurance and driving record. This is something that a lot of car owners are not aware of!
In certain situations, insurance companies may even refuse to pay a claim if a vehicle was lent to another person. For example, an insurance company will deny your claim if:

• The accident was caused by a borrower who was driving under the influence of alcohol and or drugs
• The borrower was not declared under the terms of your insurance policy
• The borrower does not have a driver’s licence or has had it suspended

In this case, any denied claims would also mean that you could be liable for any damages caused by the person who borrowed your car.
We’ll discuss these reasons in more detail below:

Reasons An Insurance Company Can Decline Your Claim

1. The person who borrowed your car doesn’t have a driver’s licence.
Allowing a person without a valid driver’s licence or with a suspended licence to drive your car is considered a violation of your insurance policy. As such, your insurance company will most likely deny your claim. You will then be held responsible for any damages or liabilities incurred.
If, however, you were not aware that the borrower does not have a licence or has a suspended one, then the chances of getting denied are lower. However, it’s still important to check if the borrower has a valid licence. You can check licence validity online with the help of the Ontario Ministry of Transportation.
Ontario’s Vehicle Impoundment Program aims to get drivers with suspended licenses off the road. If the person who borrowed your car is found to have a suspended licence, your vehicle will be impounded and held for a minimum of 45 days on account of the following violations:

• Driving under the influence
• Driving while in violation of any condition on their driver’s licence
• Driving while disqualified
• Not being able to complete the requirements to reinstate a suspended licence
• Leaving or escaping the scene of an accident

2. If people borrow and use your car regularly.
Insurance-wise,there’s a huge difference between occasionally lending your car to someone and letting them drive it regularly.
When borrowing a car long-term or on a regular basis, most insurance companies stipulate that the borrower should be added to the insurance policy as an ‘occasional driver.’ This also increases your monthly premium on account of secondary driver insurance.
However, suppose the person remains undeclared, and they get into an accident. In that case, your insurer will likely deny your claim on the grounds of failing to disclose your arrangement with the borrower.

3. If your car is used for deliveries
Insurance companies are careful to outline the uses of a vehicle according to its insurance policy. As such, if your friend or family member regularly uses your car to deliver goods like food and packages, or even people, your accident claim may be denied.
This is because delivering goods and persons counts as a commercial service and is therefore outside the bounds of personal insurance.
On the other hand, if the borrower used your car for deliveries but you were not aware of it, your insurer may grant your claim. However, there are no guarantees that it will be approved, so it’s always better to err on the side of caution before lending anyone your keys.
If you want to go into business with friends or family and have decided to offer up your car for delivery purposes, then it is best to look into companies that offer coverage for individuals who wish to use a personal vehicle for commercial purposes.

How to Protect Yourself When Borrowing or Lending a Car.
So,can you get in trouble for letting someone borrow your car? Based on what we’ve discussed so far, the answer is yes, you can.
However, there are also several ways to protect yourself. Before lending a car to a family member or a friend, ensure that you have checked or done the following:

• Check if the borrower has a valid driver’s licence
• Place a copy of the registration and insurance policy in the car. Let the borrower know where these are located, too.
• If possible, ask the borrower to write down their purpose for using the car and where it will be used. This will facilitate your agreement and will help prevent confusion down the road.
• Remind the borrower that they are the only one allowed to drive the car.