Borrowed car accidents tend to be legally and emotionally complex. Whether you borrowed a car or lent your vehicle to a friend, knowing about liability, insurance implications, and what to do afterward is essential to protecting your interests. Knowing how insurance coverage operates in these accidents can prevent miscommunication and reduce the risk of financial exposure.
Insurance Follows the Vehicle, Not the Driver
The most misleading fact about car insurance is that it may follow the car, not the driver. That means the car’s insurance owner will typically be the first coverage in case of an accident involving a borrowed car. When you are using your friend’s vehicle and are involved in an accident, their insurance company will pay for repairs first, within policy limits. If those limits are exceeded, your policy (if you have it) can act as secondary coverage.
However, things become muddled if the driver wasn’t specifically permitted to drive the car, or if they were engaging in a crime or driving under the influence. Coverage could be denied in those cases and placed squarely on the driver.
Determine Permissive Use
Permissive use is a case where the vehicle owner has granted permission in express or implied terms to another person to drive their vehicle. Most standard policies cover permissive users, but excluded drivers, specifically not covered by a policy, are a different story altogether. If an excluded driver causes an accident, the insurance company may deny the claim outright, leaving it all on the driver. Determining permissive use is vital to resolving whose policy covers and if additional legal frustrations will follow.
Legal Advice May Be Needed
With the complexity, especially when injury or severe damage is involved, seeking the counsel of a car accident attorney is generally the most prudent method of self-defense. Lawyers can translate policy language, determine fault, and represent your interests in any ensuing dispute. Even innocent motorists can find themselves facing serious monetary repercussions without proper representation.
Commercial and Business Use Considerations
Driving a borrowed car for business purposes, i.e., rideshare or delivery, can negate coverage under a personal car policy. When you borrow a vehicle for work or a side gig and have an accident, neither your nor the owner’s policy will pay, unless you carry commercial insurance.
What to Do Immediately After the Accident
Regardless of whose car it is, the standard post-accident steps still apply:
- Call emergency services if there are injuries
- Document the scene with photos and witness statements
- Exchange information with the other driver
- Report the accident to the police and both insurance companies involved
Be transparent when reporting. Concealing that the vehicle was borrowed can lead to coverage denial or even insurance fraud allegations.
How Liability Is Assigned
Liability in a borrowed car accident hinges on determining fault, local law, and policy terms. In no-fault jurisdictions, each side’s insurance might deal with its damages independently of fault. However, in fault states, the at-fault driver’s insurance will be paying for the damages, whether its their car of somebody else’s. In other states, the owner’s liability insurance will cover the driver if they were driving with permission.
Accidents involving borrowed cars pose special insurance and legal issues requiring a prompt and informed response. Knowing whose policy is in effect, how permissive use operates, and what to do after an accident can significantly affect liability and compensation. If unsure, seek the advice of a legal expert to prevent expensive errors and to protect your rights.
