Your friend asks to borrow your car to run an errand. Do you let her? Before handing over your keys, this is what you need to know about your car insurance.
In case of an accident, your insurance gets affected, regardless of whether the individual borrowing your car has insurance or not. Your insurance (the lender) is the primary coverage and the driver’s insurance is considered secondary, meaning the secondary insurance will come into play in case of personal liability, medical expenses or if the primary coverage is exhausted in for damages. However, if the borrower is not insured then the lender is completely liable for any damages, even if it exceeds the coverage.
Permissive & Non- Permissive Use
Permissive Use drivers are those who have permission to drive, most likely family members or people within your household. Permissive use drivers are offered reduced coverage while the lender has full coverage. Non-Permissive Use is when a lender has not given permission to borrow their car or if the car is stolen. Typically, the owner is not liable for damages caused to other vehicles, but damages to the owner’s car are covered by the owner’s insurance. In order to qualify for non-permissive use, the driver of the insured vehicle must admit that he or she took the vehicle without permission.
Excluding and Listing Drivers
An excluded driver is someone that is removed from an auto insurance policy. Excluding drivers with bad driving records is a good idea since it will reduce premiums. However, if the excluded driver is granted permission to drive and ends up in an accident, the owner’s insurance will not cover any damages. In the long run, it is best to simply list all family members on to the coverage.
*For further questions and concerns, please contact your insurance provider or feel free to give us a call. We will gladly assist you. Thank you!