How the Rules Apply When Someone Crashes Your Car
So what happens when someone else is driving my car and gets in an accident? Short answer: an insurance policy covers a specific car, not a specific driver.
Thus, if someone crashes your car, your insurance will be the one to cover it. That said, there are subtleties and cases where things work out differently.
First off, let’s look at how insurance covers both drivers and vehicles involved. The main distinction here lies between whether you live in a no-fault or at-fault (tort) state.
Before we go into how insurance applies, you need to figure out what type of at-fault state you live in. There are four flavors, each with their own rules. The map below and accompanying descriptions of each will give you an idea of how fault will apply to insurance claims and payments.
All Vehicles Involved
In an at-fault (tort) state, whose insurance covers what depends on who is to blame for the crash. In both cases, any damage to your car will be covered by your collision coverage. The other driver’s insurance will do the same for theirs. That part is simple enough.
The Other Driver
It is a different story if there are injuries or other property damage. If your friend is the cause of the crash, the other driver will file a claim against your insurance. This will pay out to cover any medical bills or property damage. (That bit is where the type of at-fault state you live in becomes most important).
What if the damages exceed your coverage limits? In the case where your insurance does not have enough coverage, your friend’s policy (if they have one) will step in as secondary to cover the rest. The reverse of all this is true if the other driver is at fault. Your friend would file a claim against the other driver’s policy for any damage to property or person.
If your friend suffers injury, their medical bills would likely be on them. Though it is possible yours or their MedPay or PIP coverage could apply.
In a no-fault state, everyone only files with their own insurer. Your friend would make a claim for any damage to vehicle, person, or property. The same would apply to the other driver. However, in some states, the other driver may be able to sue for damages if certain thresholds are met.
Exceptions to the Rule
There are of course exceptions. Let’s say the person you are lending the car to is a household member or otherwise frequent user of your car. If they are not listed on your policy, you will run into trouble when making a claim. Your insurer may use this as grounds for denying coverage and be in their rights to do so. The same goes for when you lend the car to an excluded driver (i.e. someone you have specifically excluded on your policy). Note: Kansas, Michigan, New York, Virginia, and Wisconsin do not allow such driver exclusions.
Another exception applies if the vehicle was taken without your permission. If the car is stolen and then crashed, your comprehensive coverage would cover repairs instead of your collision coverage. If a friend takes it, however, this is deemed “unauthorized use” instead of theft. In this case, your collision coverage would apply instead of comprehensive.
Possible Car Borrowing and Crashing Scenarios
Let’s look at a few scenarios to see how insurance plays out in each case. Things differ based on a few variables.
- Who borrows the car
- Whether they have permission
- Their insurance status
- Whether you live in a no-fault or tort state
Insured Friend Drives Car With Permission
Since a policy follows vehicle not person, your insurance will primarily apply. Repairs to the car will come entirely from your collision coverage if you have any. If you don’t have collision coverage but your friend does, there is a (small) chance their policy will cover it. You will have to read your friend’s policy carefully. Look for what qualifies as a “non-owned auto” or something similar. Your car may qualify as a non-owned auto under your friend’s policy. If it does, then your friend’s policy would cover your car. If you speak with an adjuster, politely (but persistently) ask about this specifically. Find out exactly why it would not qualify as a non-owned auto.
Damages to others on the other hand, whether injury, vehicle, or other property, will come from your liability coverage. If those damages exceed your policy limits, your friend’s policy can often apply secondarily to cover the rest. Known as “pro rata” (i.e. proportional).
If your friend was also injured, they could get coverage if you or they have Medical Payments (MedPay) or have Personal Injury Protection (PIP) coverage. PIP and MedPay are different from the rest of a policy and tend to follow a driver first and vehicle second. (Sometimes MedPay follows the vehicle and not driver though, so check your policy). That means they may be able to use your PIP or MedPay as secondary coverage if you have it.
What if you live in a fault (tort) state and your friend is not at fault? Any injuries or property damage would come from the other driver’s insurance instead of yours. This varies by what type of tort state it is though. If it was a no-fault state, both you and the other driver would make claims on your own policies.
Uninsured Friend Drives Car With Permission
There’s only one difference here. You won’t have your friend’s insurance to serve as backup. Thus, if injuries or property damage exceed your limits, you may suffer a lawsuit for the rest.
Unlicensed Friend Drives Car With Permission
This is a bad idea. Many policies can exclude coverage if a driver does not have a current license. If your friend has no license, they are likely uninsured as well. That leaves you with no insurance coverage at all. Your insurer may allow you to use your collision coverage. But if the policy excludes non-licensed drivers, it is unlikely they will cover any liability for other damages. In that case, any injuries to others or their property will entirely come out of your pocket. You can argue that it was not you driving, but car owners often have liability for anyone they permit to drive their car.
Friend Drives Car Without Permission
What if your insured friend borrowed your car without your knowledge or permission? Their insurance will generally kick in first. Unlike theft, insurers refer to this as “unauthorized use.” You may have to provide evidence that you did not give permission or know about it. Making a police report about this unauthorized use and the crash can help. Lying about it is a bad idea. Insurance fraud is a crime, and if caught, you’ll have financial and legal issues to deal with. You may still have to use your own collision coverage for damage to your vehicle though.
If your friend has no insurance, you will likely have to use your own to cover any injuries to other people, their vehicles, or their property.
Car is Stolen
In this case, your comprehensive coverage will pay for damages to your vehicle instead of collision coverage. If the thief is caught and has insurance, their policy may cover injuries or damages to other people or their property. If they do not, or their insurer denies coverage, your own insurance will apply.
Insurance Price Impact
Will my rates go up if they got in an accident?
Even though it is your friend’s behavior that crashed your car, your insurance rates may still go up. As discussed, policies follow the vehicle, not the driver. You may be spared an increase, but it depends on a few factors.
If the driver gets a ticket will my rates go up?
In this case, you should be in the clear. Tickets apply to an individual’s driving record, not to a vehicle. Since no one is making claims on anyone else’s insurance, your insurer has little reason to penalize you. Your friend, however, may find an unpleasant surprise when they go to renew their policy. Moving violations are often reported to the state DMV. When it comes time for the policy’s renewal, insurers may pull the records from the DMV. With that, they may adjust premiums accordingly.
Checklist Before You Lend Your Car
- Make sure you have collision coverage.
- If you don’t, make sure your friend’s collision coverage applies to your vehicle.
- If possible, only lend to others who also have insurance.
- Do not lend it to those who drive your car often. Add them to your policy instead.
- Never lend to someone who is intoxicated, unlicensed, or excluded on your policy.
Is it legal to drive a borrowed car without your own insurance?
Yes, as long as the owner of the car has insurance, it is legal to drive their car.
What if the person driving your vehicle also has insurance?
As discussed, the owner of the car’s insurance would apply first. The borrower’s insurance would only come in if the owner’s liability (property damage and bodily injury) coverage limits are exceeded.
What if someone takes your car without your permission?
It depends on whether the car was stolen or taken without permission by someone you know. See the scenarios above for more details.