Help! My friend crashed my car!

Your friend Julie calls in a panic and asks to borrow your car. She sounds like she really needs it, so you’re happy to help. But as she drives away in your car, you realize… does Julie have insurance? Is my car protected? What happens if she has an accident and gets hurt in my car?

As a car owner, you are allowed to loan your car to friends and family. As someone who holds car insurance, this means your insurance company knows you will occasionally lend out your car. When you allow someone else to drive your card, they become the “permissive user,” – which means they are covered by the same insurance you purchased for your car. One would hope that your friend also has insurance, but when driving your car, it’s your insurance that covers her first.

In South Carolina, liability insurance follows the car, meaning the insurance you bought for your car covers the car, even when you’re not driving it. This assumes, though, that you gave permission to the other driver to use your car.

This rule does not necessarily apply to family members, though. If a family member will regularly be driving a car, you need to add him or her to your insurance policy. Adding a teenaged driver to your policy may make the rates increase, but you’ll be in worse financial difficulties if your teenager crashes a car while not on your policy.

If your friend Julie, who has your permission to borrow the car, gets in an accident while driving your car, your insurance will first kick in, and Julie’s insurance will likely pay if your insurance limits are exhausted. Your collision insurance will pay for damage to the car. 

Keep in mind: if Julie has a history of being a bad driver and you are aware of that history or you loan her your car under circumstances where you reasonably should know she could put others at risk (I.e. intoxication) you may be sued individually for negligent entrustment by the person Julie injures in a wreck.  Any at-fault accident by a person to whom you loan your vehicle will likely affect your insurance. After your insurance has paid to recover her mistakes, your premiums will almost certainly increase.

Important takeaways:

• If you give permission to others to drive your car, they are covered by your insurance first.
• Family members are not covered the same as others. Add family members to your policy; don’t assume you can just loan the car whenever they need it.
• Choose wisely the friends you loan your car to and NEVER loan your vehicle to anyone who has a history of bad driving.  Their accidents could affect you personally and may increase future insurance payments.

If you have questions about what your insurance covers, contact your insurance agent. If you’ve been in an accident or a friend had an accident in your car, contact the auto accident lawyers at Hodge & Langley Law Firm to protect yourself and your finances.