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Published: February 2, 2022Last updated: August 16, 2022

Borrowed Car Coverage: Who’s Responsible?

Follow these tips whether you’re borrowing or loaning a car.

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People often drive cars that do not belong to them. Perhaps you don’t own a vehicle, but you borrow your roommate’s car for a weekend trip. This common scenario can complicate insurance liability coverage in the event of an accident. This article explains how insurance works for borrowed cars so that you can feel peace of mind when lending or borrowing a car.

Who Is Responsible for an Accident in a Borrowed Car?

As a general rule, car insurance follows the car, not the driver.1 Typically, the owner of a car is liable for any damages that someone else driving their car with permission causes.

Most auto insurance policies have a “permissive driver clause,” which means that the owner can lend out their vehicle occasionally, and their insurance will still cover any damages. In such a circumstance, the borrower is not responsible for damages up to the amounts included in the policy. If you are considering lending out your car, make sure you trust the borrower first and foremost.

Non-Owner Insurance: Can You Get Car Insurance Without a Car?

In most circumstances, the car owner’s insurance will cover any driver borrowing it with permission. However, it may be a good idea to purchase your non-owner insurance if you borrow the same car frequently and drive it long distances.

Non-owner insurance can cover bodily injury and property damage in the event of an accident, but it does not cover vehicle damage or your own injuries (for that, you’d need collision and medical payments coverage). Generally, rates for non-owner insurance are less expensive than standard auto insurance costs.

Non-owner insurance kicks in if the limits of the owner’s policy are reached, or if you are explicitly excluded from their policy. It can sometimes pay for personal injury or medical expenses, but it depends on the policy.

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Consider purchasing non-owner car insurance if you share or rent cars often, but be aware that it may not cover damage to the vehicle you operate.

Can You Get Car Insurance Without a License?

Perhaps you don’t have a driver’s license, but you own a car and need insurance for when others drive it. Can you get car insurance without a license? Furthermore, can you get car insurance with a suspended license?

In these cases, you may want to purchase insurance despite your lack of a license. Legally, you do not need a driver’s license to get car insurance, but not every company offers insurance to unlicensed people.

The Hartford is one provider that offers such insurance. The key is to purchase a policy and list yourself as an excluded driver. This reduces the risk for the insurance provider.

Does Insurance Cover Borrowed Vehicles?

Owner’s insurance typically covers expenses related to accidents that someone borrowing the owner’s car caused, even if the driver has their own insurance.

However, there are circumstances where a car owner’s insurance does not cover a borrowed car.

  • Frequent drivers: This is not defined strictly, but if someone borrows a car regularly, the owner’s insurance may not cover them.
  • Member of household: If someone in your household is not a car owner but borrows a car frequently, you should add them to your insurance policy.
  • Excluded drivers: It may go without saying, but if somebody is explicitly excluded from coverage, they will not be covered when driving your car. This is common in families with teens who have poor driving records and are explicitly excluded from car insurance coverage.
  • Commercial purposes: Standard auto insurance will not apply if somebody is driving your car for business purposes.

Primary vs. Secondary Insurance Coverage

In the case of car lending, primary insurance is the owner’s coverage, while secondary insurance is the borrower’s coverage. In the case of an accident, you should first submit a claim to the primary insurer. However, a borrower’s secondary insurance may help pay for damage in certain circumstances.

Insurance Policy

For instance, if a borrower causes an accident that the owner’s insurance does not completely cover, their secondary insurance may cover the remaining costs. But they must have a policy that covers borrowed vehicles. Some insurance policies explicitly state that they don’t cover certain people. In that case, or if the borrower does not have their own auto insurance, it’s likely that the owner will have to pay for the damages exceeding their policy coverage with their own money.

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If you live in the same household as the car borrower, you may be required to list them on your policy.

However, none of this applies if you do not give the person permission to drive your car. This includes instances of theft and explicit refusal to borrow. But you will have to prove this to your insurance provider, which can be difficult.

What to Do After Getting Into an Accident in a Borrowed Car

All the usual tips apply when it comes to an accident, whether you are borrowing a car or get into an accident with a borrowed car.

  1. Remain at the scene.
  2. Call an ambulance if there are any injuries.
  3. Contact the police and file a report. Get the names and badge numbers of all the officers involved. You’ll want to include the police report in your claim. Get a copy of the police report for your files.
  4. Document the vehicle damages, the vehicle identification numbers of all the cars involved, and the names, contact information, and insurance information of everyone involved. Write down the date, time, and weather conditions of the accident. Take pictures of the damages.
  5. Contact the person you borrowed the car from. They can file an insurance claim for you, or they might have you file the claim. If their insurance is insufficient and you have insurance, you may have to file a claim with your own provider.
  6. If the accident wasn’t your fault, you’ll file a third-party claim with the at-fault party’s insurance provider. You might file bodily injury or property damage claims.
  7. If the accident was your fault, file medical payments coverage and collision coverage claims to reimburse you for your injuries and damages. If you lack these coverages, you will have to pay out of pocket for your medical costs and property damage, as well as the other party’s.

Borrowing a Car for Business

If you are lending or borrowing a car for commercial activity, like ridesharing, then you need to check with your insurance provider. It is possible that your coverage won’t apply for business use and you’ll have to purchase commercial insurance. If that’s the case, check out the best ridesharing auto insurance.

Tips for Sharing Vehicles

Before you borrow someone else’s vehicle or loan a vehicle, read through these tips:

  1. Check your insurance policy to ensure coverage. If you don’t understand your policy, contact your insurance agent or broker directly.
  2. Only lend to people you trust.
  3. Be clear about expectations (length of time, usage, cleanliness, etc.).
  4. Take photos of the car first to ensure that your provider will cover new damages.

Questions to Ask if You’re Loaning or Borrowing a Vehicle

Don’t be afraid to ask for information, whether you’re loaning or borrowing a vehicle.

Loaning a Vehicle

  • Are you a capable, confident driver?
  • Are you licensed?
  • Do you have your own car insurance?
  • f so, what coverage does it provide?
  • How long do you need the car?
  • When do you plan to return the car?
  • What do you plan to use the car for?

Borrowing a Vehicle

  • Do I have permission to borrow the car?
  • Where is the registration and insurance information?
  • Do you have car insurance that covers me in an accident?
  • Does your car have any issues or quirks I should know about?

Recap

Borrowing a car is fine, but it’s important to be informed of the insurance implications. For more information, keep reading our car insurance FAQs.

Frequently Asked Questions

Learn more about borrowed car coverage in our answers to these frequently asked questions.

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

Yes, most insurance companies will raise your premiums after an at-fault accident, even if you were not the one driving the car.

Is it legal to drive a borrowed car without your own auto insurance?

It is legal to drive a borrowed car even without your own insurance. This is because car insurance follows the car, not the driver.

Will my insurance rates go up if someone borrows my car and gets a ticket?

Your rates will not go up if someone gets a ticket while driving your car. This is because traffic violations are linked to a driver’s license rather than the car’s registration.

Do I need car insurance if I borrow the same car frequently?

If you borrow the same car frequently, it may be a good idea to get your own coverage. It depends on where you live, who owns the car, and how many miles you drive with it.

Citations

  1. Does Car Insurance Cover the Car or the Driver? Car and Driver. (2022).
    https://www.caranddriver.com/car-insurance/a31269297/does-car-insurance-cover-the-car-or-the-driver/