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When you Let Someone Borrow your Car.

Posted on July 20, 2018
Munn Insurance - When you let someone borrow your car

So, your friend asks to borrow your car and being the good friend that you are, you happily oblige.  And why wouldn’t you.  You throw them the keys without a moment’s hesitation.  But did you know that when you toss them the keys you are also tossing them your insurance too?

Whether your friend needs to borrow your pick-up truck to move a couch or your aunt is visiting for the weekend and would like to have your car during her stay to visit some friends, it’s not uncommon to want to lend your vehicle to another driver from time to time.

But what happens if the person you lend your vehicle to gets into an accident? Car insurance follows the vehicle.  So, when you toss your friend the keys you are also tossing them your insurance.  As a result, it’s your auto policy that covers your car regardless of who’s driving it as long the driver:

  • Is licensed to drive in Canada
  • Has your permission (verbal or written) to drive your vehicle
  • Sticks to the rules outlined in your policy (e.g., if your policy covers personal use, your aunt can’t borrow your car for their courier business)
  • Doesn’t participate in illegal activities while using your vehicle (e.g., street racing or drinking and driving)

The exception to this is if you never gave permission to your friend to borrow the car, in which case they’re likely accountable.

So, remember, if you lend your car to a friend, and they hit another car, it is your liability coverage that pays the damages. And that means you are the one responsible for filing the claim, paying the deductible and, here is the kicker, you will have to pay any additional premium that is added because of the accident. This claim would then likely remain in your file, which could affect your premium or other aspects of your coverage into the future.

Every insurance company has its own set of requirements and rules.  It’s the small print that the industry is known for!  It is therefore wise to review your policy documents or contact your broker, who can help you understand all that documentation, if you have any questions about the specific rules outlined by your own insurance company.

You may also want to consider asking your friend a few questions about what they’re using your vehicle for and where they’ll be going. If you’re not confident in someone’s driving skills or that they’ll follow the rules outlined in your insurance policy, you might want to reconsider lending them your vehicle.

One more point, if the driver who wants to use your car, say your 16-year-old daughter, only has their learner’s permit and is driving under your required supervision, they generally don’t need to be added as an occasional driver. They will be covered by your policy in the same way that someone who borrows your car is covered.  While this is true in most locations, there are exceptions; so, it would be wise to just let your insurance broker know that a new driver will be practicing in your car.

In addition to insuring your cars, home, and other prized possessions, Munn Insurance is committed to helping you and your loved ones stay safe and protected. If you would like more information on your auto policy, please contact Munn Insurance at 1-855-726-8627 today.