Friendships are some of the most important relationships we have, which is why many of us may feel conflicted when a friend asks to borrow our car. Even if your friend is the safest driver you know, accidents happen—and, sometimes, seemingly conscientious drivers are to blame. So is it okay to let a friend borrow your car? The answer is neither a resounding yes or no.
Insurance applies to the car, not the driver. This means that as long as you give your friend permission to drive your car, your car insurance will cover them. If they cause an accident, your insurance will be used to cover the other party's (the victim's) damages. Your friend's insurance will only kick in if there are costs beyond your policy limits. It is important to note that:
- Your rates are likely to go up if your friend causes an accident while driving your car;
- Any damage to your car will not be covered by insurance unless you have collision coverage; and
- If you have collision coverage, you will still need to pay your deductible to use it.
On the other hand, if your friend is involved in an accident but the other driver is to blame, the at-fault driver's insurance will be responsible for any injuries to your friend. It should also cover any damage that was done to your vehicle.
Another thing to keep in mind is that your insurance will not cover people who borrow your car without your permission. The same goes for drivers who are excluded from your policy, such as a household or family member considered to be a “high-risk driver” because of past accidents and traffic tickets. Many people exclude high-risk drivers from their coverage to reduce rates. If you have done this to the person borrowing your car, they will not be covered in the event of a crash.
Lastly, before lending your car to a friend, consider how often they are asking to use it. A friend that borrows your car weekly or a few times a month may need to be added to your insurance policy. Your rates will likely go up, but you can rest assured that you will have the right coverage in the event of a crash.
As you can see, whether or not you should lend your car to a friend depends on several factors. It isn't illegal in most cases, but you could end up with higher insurance rates and out-of-pocket expenses. For many, their answer comes down to how comfortable they are being stuck with these costs. So if your friend says no to borrowing their car, don't take it personally.