A friend or relative needs your help, their car is out of commission and they want to borrow yours for a quick errand. You like to think of yourself as nice and helpful, so of course, you say “yes”. While it may seem like a kind gesture, letting them use your car is actually putting you in a bad position.

What many people don’t realize is that auto insurance follows the vehicle, not the driver. That means when you lend your vehicle to someone, you are also lending them your coverage. While you lent your car for free, it could end up costly for you.

Here’s why; when we loan a car or truck to a friend or relative, that’s called permissive use. If you have “broad protection insurance” they are covered by your vehicle’s insurance policy. While most accidents will be covered, you could be liable if people are seriously hurt in the accident and the medical and other expenses are more than you are insured for. Those injured parties could sue you for medical costs, time lost from work and property damage.

Yep, you weren’t driving, but because the accident involved your vehicle you will have to:

  • Contact your insurance company
  • File a claim
  • Pay any deductibles
  • Cover expenses beyond your insurance limits
  • Prepare for a probable rate hike resulting from the accident

Here’s something to keep in mind: a permissive operator is a person who does not reside in your household, is not listed on the policy as a household member, and is operating the vehicle with your permission. A crash caused by a permissive operator will most likely be covered.

However – and this is very important – if you have named an excluded driver on the policy, insurance will not pay for damages caused in a crash by the excluded driver, even if they were using your car or truck in an emergency. So, before you let someone else use your vehicle:

  • Check that they have a valid driver’s license and insurance
  • Make sure your insurance policy will cover them if they have an accident
  • Contact your insurance company for a policy review and that you have adequate and broad protection
  • Be ready to accept the consequences if they cause a crash


This article is furnished by California Casualty, providing auto and home insurance to educators, law enforcement officers, firefighters, and nurses. Get a quote at 1.866.704.8614 or www.calcas.com.

California Casualty

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