Borrowing & Lending Cars

The school year is quickly approaching and many students are leaving for their college dorms and apartments. If you are living at college, it’s important to know the implications of borrowing a friend’s car or lending your car to others. If your child is off to college, be sure he/she is also aware of the associated risks of sharing cars. It is a common misconception that the insurance follows the driver; however, insurance actually follows the car. In order to avoid an uncomfortable situation with your friend, try to avoid sharing cars altogether.

For example, your roommate needs to run to the grocery store to pick up a few items and borrows your car. On her way to the store, she rear-ended another vehicle. The primary coverage that would pay for damages to the other driver is your own auto insurance. This means you’d have to:

  • File the claim with your insurance company
  • Pay your collision deductible
  • Accept any resulting rate increases

If the damages exceed your available limits, only then would the roommate’s coverage step in as excess coverage. 

Be sure to think twice before lending your car, otherwise you may be looking at a much higher premium and a strained relationship with your friend or roommate.

Call us to discuss.