Accident With a Borrowed Car: Whose policy pays?
If you lend your car to a friend and your friend has an accident, it might be your insurance that’s on the hook. It all depends on the insurance company that issued your policy. One company’s policy may state: “the insurance follows the car”; while another company’s policy says the driver’s insurance is the primary coverage even though you own the vehicle involved.
Let’s take a look at the two different scenarios:
- If the insurance follows the car and you lend your car to a friend, your coverage is considered the primary coverage. If your friend has an accident, it’s your insurance that will pay the claim. If the accident is serious enough to use up all of your policy’s coverage, then your friend’s coverage, which is considered secondary, might also be used.
- If the insurance follows the driver, coverage is provided the other way around. If you lend your car to a friend and they have an accident, it’s their policy that is considered primary coverage, meaning their insurance company will pay the claim. In this case, your policy would be secondary and wouldn’t pay for anything unless your friend’s policy limits were used up.
All these rules go out the window in many cases if the person borrowing the car happens to be a relative who resides in the same household as the owner. You should read your policy carefully to see what type of coverage applies to you.
Remember these two things: First, always exercise caution when it comes to lending your car. Second, if you’re ever in doubt about whether you or another driver is covered in any given situation, please call us.
Rental Cars: Should you purchase rental agency coverage?
If you have collision and comprehensive (“other than collision”) coverages on your own car, you are most likely covered if you’re traveling in the United States, its territories and possessions or Canada (for example, travel in Mexico, the Bahamas or Europe would not be covered). Most policies (except business policies) cover any rental car that you drive at no additional premium. Business cars frequently require an extra premium to afford the same coverage. Give us a call before you leave for your “fun in the sun and/or snow” to confirm your coverage.
What To Do After an Accident.
You’ve been in an accident. Here are some general guidelines about what to do next:
- Stop at once. Never leave the scene of even a MINOR accident.
- Seek medical assistance and summon police.
- Do not admit fault. Do not comment about the accident to anyone but your insurance representative and the police. Never accept or make an offer of cash, check or “private” settlement.
- Gather accident information. Note the date and time of accident.
- Obtain information on the other driver including: name, address, phone number, make of car, vehicle license number, insurance company and agent’s name and telephone number.
- Record a description of what occurred.
- Draw a diagram of the accident showing the direction of both cars and the point of the accident. Include street names and location of traffic signs/signals.
- Report the accident promptly to your insurance agent.