Your brother-in-law or a neighbor asks you to borrow your car, truck, or another road-worthy vehicle.
You have all allowed someone else to borrow our car before because you trust them or sympathize with the jam they are in.
This time, the person runs a red light and causes a severe collision, resulting in personal injury to folks in the other vehicle.
Where does this leave you and your insurance company?
If someone asks to borrow your vehicle, what are the risks?
If that person has a car accident that is his or her fault, what does that mean to you?
Simply stated, if someone not on your auto insurance policy has an accident while driving your car, your insurance is on the hook. That could cost you, in the long run, increased insurance premiums.
Auto insurance is primarily for the vehicle. When you let someone use your car, your insurance company is still insuring the vehicle and any driver of your vehicle that has your permission to drive it.
The driver of your car or truck may well have their own insurance, but it becomes secondary to the vehicle’s insurance.
However, generally, you do not have any personal liability of your own for allowing someone else to drive your car.
That situation could change if you allowed an intoxicated person to drive your car, allowed someone that you know is not properly licensed to drive, or allowed some other problem that you should have known that would make the person a dangerous driver.
These situations can cause you to have civil liability for injuries to innocent parties.
Are there Indiana Statutes on Permitting Another to Drive Your Vehicle?
Interestingly, there is no statute in Indiana giving criminal liability for allowing an intoxicated person to drive your car or truck. However, there is a statute giving criminal liability for allowing an unlicensed driver to drive your vehicle:
Sec. 3. (a) A person that has a motor vehicle in the person’s custody may not cause or knowingly permit an individual to operate the vehicle upon a highway unless the individual holds a valid driver’s license or permit under this article for the type of motor vehicle that the individual is operating.
(b) A person who violates this section commits a Class C infraction.
So, if you are considering letting someone not on your policy drive your car, here are questions you need answers to:
- Is the person licensed to drive? If they’re visiting from out of state, you don’t need to worry. If they have a driver’s license from another country, check your state’s requirements—the driver may need to apply for an International Driving Permit before arriving in the U.S.
- Does the person have a good driving record?
- Are your auto insurance premiums up to date?
- What do they plan to use the car for? If it’s any kind of commercial activity, like driving for a ridesharing program, you’ll need to check your auto insurance policy.
Again, in Indiana, the car owner’s auto insurance provides primary coverage. If the car is being driven for commercial purposes and you only have a personal policy, you may not have sufficient coverage.
Six issues when lending your vehicle to someone
1. Permissive vs. Non-Permissive Use
Whether or not you granted permission for the other driver to use the vehicle can be a factor in determining if you’ll be held liable for damages.
For example, suppose a friend takes your car without your knowledge or a stranger steals your vehicle. In that case, you’re not typically liable for any damages to the property of others as permission was not given (you’d still have to pay for any damages to your vehicle using your insurance, however).
2. Borrower’s Household Status
Is the person a part of your household? If so, they might be included in your insurance, and the damages will be covered just like if you were the one behind the wheel. Always be sure to check your insurance policy to see if it covers other drivers living at your address.
If not, you may want to add them if you believe they’ll be driving your vehicle on occasion.
3. Who’s at Fault
If the person borrowing your car is not at fault for the accident, then the other car’s driver will most likely pay.
4. Insurance Limits
If the damages exceed the amount your insurance covers, then the insurance of the driver borrowing the vehicle will cover up to their policy limits of liability, assuming they have their auto policy.
5. Lending Your Car to a Dangerous Driver or Unlicensed Driver
If you lend your vehicle to an intoxicated driver, you could be held liable and sued for personal damages. Never allow a drunk driver to use your vehicle. Never let an unlicensed driver borrow your car.
6. Valet Accidents
Businesses are generally not liable for damage that occurs to your car once you hand it over (the ticket you receive will probably state this as well). However, if a valet driver causes an accident because he or she was at fault, then the business could still be held responsible.
These variables can interact in different ways, or one might override another. On top of these variables, the specific nature of your car insurance coverage can affect whether or not your insurance will pay for certain events.
A little hassle now may save you later.
The moral of the story may be that if you want to help the person with the use of your car, then consider driving them yourself to where they need to be. A little hassle now may save you a much bigger hassle and keep your auto insurance from doubling later.
Call the lawyers at Garrison Law Firm to learn more at 317-842-8283.