Should you let your friend borrow your car? | PEMCO

Most of us probably enjoy being able to help a friend or family member in need. It feels good to “lend a hand” when a neighbor is in a pinch. At PEMCO, we feel the same way!  
 
But when it comes to letting people borrow our cars, is it a safe and responsible choice to offer help in this way? Are there any insurance implications you should be aware of, as the owner of the vehicle? And what happens if someone is in a collision while driving your car? 
 
In this article, our insurance experts will dive into all the insurance implications of letting someone else drive your car, as well as other things you may want to consider. 

How insurance works when someone else drives your car 

Before you hand over your keys, here are some things you should know: 

• Your insurance follows your car, not you, the driver. This means that if your friend gets into an accident while driving your car, your insurance policy will be the primary one to cover the damages, regardless of who’s at fault. Your friend's insurance policy may act as secondary coverage (depending on the circumstances), but only if they have their own car and insurance. 

• Even if your friend is willing to pay for the damages, you may still face higher premiums or other impacts upon renewal. Remember, claim activity can have an impact on your future insurability.  

• If your friend drives your car without your permission and is in an accident, your Auto policy will still cover damage to your vehicle (if you have collision coverage). However, your liability coverage would not extend to the driver who drove your car without permission. That means, if they were found liable for property damage or injury to someone else, they would be responsible. 

•  You may be held liable for any injuries or property damage caused by your friend (or whoever borrowed your car) if you had prior knowledge of them being reckless, incompetent, or unfit to drive. If the accident is serious and the damages exceed your policy limits, the other party may sue you and your friend for the remaining costs. 

• You may not be covered if the borrower uses your car for business purposes. If your friend drives your car to deliver goods, transport passengers, or perform any other commercial activity, your personal insurance policy may not cover the accident.  

How to decide if you should lend your car to a friend 

It all comes down to this: How much risk are you willing to take on? Here are a few things you can consider to help you decide:  

• Ask your friend about their driving history and insurance status. If they have a current license, a clean record, and a valid insurance policy, you may feel more comfortable lending them your car.  

• Consider the circumstances. Is your friend impaired in any way or unfit to drive? If the answer is “yes,” then your answer to them should be a resounding “no.” 

• Check your insurance policy and limits. Review your coverage and see how much you are protected in case of an accident. (If you have questions about your own Auto policy, you can log into your pemco.com self-service account, or speak with an agent at 1-800-467-3626. 

• Set some ground rules. Make sure they understand that they are responsible for any traffic violations, parking tickets, tolls, or gas expenses while using your car.  

• Be prepared.  Even if you trust your friend and they follow precautions, accidents can still happen (that’s why they’re called accidents!). Make sure you know what to do in case of an accident, and make sure your insurance information is accessible in your vehicle.  

What steps can I take to help protect myself? 

For more security, you may want to consider additional steps that can help you avoid or reduce the impacts of an accident. It’s important to keep in mind that not all additional coverages will extend to the people you let drive your car. 

Some things to consider are: 

• Umbrella liability coverage. This is an extra layer of protection that kicks in when your primary liability coverage is exhausted. It can help you pay for any damages or legal fees that exceed your policy limits if you are found liable for personal injury or property damage. It can also help protect your assets. 
   
  Unlike your Auto insurance, an umbrella policy won’t extend toward the people you let drive your car. They would need to have their own umbrella policy. However, if you are found liable or negligent for letting someone drive your vehicle who was unfit to drive, your umbrella policy may kick in.  

• Rental reimbursement coverage. This can help you pay for the cost of renting a car while your car is being repaired or replaced after an accident. This is especially useful if you rely on your car for daily needs. 

• Consider having a conversation with your kids or dependents who are of driving age. Make sure they understand the implications of letting someone else drive their car (or your car). Let them know they could be held liable if they let someone who shouldn’t be driving (unlicensed, uninsured, impaired, or otherwise unfit to drive) borrow a family car. 

If you have questions about ensuring your coverage fits your unique needs, you can speak with a licensed PEMCO agent at 1-800-467-3626, or speak with your local agent.

You don’t have to go at this insurance thing alone. We know it’s not easy to navigate, which is why we’re here! Thank you for trusting PEMCO to help protect what matters most.