They're your best friend, so you didn't hesitate to say yes when they asked to borrow your car. You handed them the keys (or fob) with a smile on your face and waved as they drove away. What could possibly go wrong?
You found out a few hours later when you met them at the body shop as they unloaded your damaged vehicle from a flatbed. It was bad, but the car your friend hit was in even worse shape. Your friend said that they'd take care of everything, but are they the one liable in an auto accident while driving your car?
In many instances, the answer is that the insurance follows the car regardless of who's driving it. It's not always that simple or clear-cut, though.
Location, Location, Location (and Other Factors)
To legally operate a motor vehicle on a road in the United States, you must have some sort of liability coverage in place. In most states this takes the form of auto liability insurance, although some allow a surety bond or some other form of self-insurance instead.
When purchasing an auto insurance policy, you'll have to answer a lot of questions. You'll be asked how many drivers are in your household and are required to provide their license numbers so their driving records can be checked.
You'll also submit detailed information about the vehicle or vehicles the policy will cover. This is an indicator of how auto insurance works. While the people listed in your policy matter and affect the final costs, the insurance is linked to the vehicles it covers. If your friend is at fault in an accident while driving your vehicle, it's likely you, through your insurance coverage on the vehicle, will pay for the damages caused to others.
Many factors can influence how liability is assigned, not the least of which is what state your vehicle is insured in. Auto insurance laws vary between states. In some, the person who insures the vehicle is always liable for damage caused by the vehicle, regardless of who was driving. Others may share liability, with the driver's insurance liable for any amount of damages that exceeds the car owner's liability coverage.
The person responsible may also be affected by the specifics of the policy. Check your policy to see if it allows permissive use. If so, this means that your insurance is in effect if you give your permission for someone to borrow your vehicle.
Restrictions on permissive use often include requiring the driver to be licensed and not using your vehicle for business or commercial purposes. If your friend borrows your car and gets into an accident while operating as a rideshare, you'll likely have issues.
Negligent Entrustment (It's as Bad as It Sounds)
The victim of an accident caused by someone else driving your vehicle may seek damages beyond the repair of their car. They can sue with a civil suit for pain and suffering, lost wages, or medical costs not covered by a personal injury policy (PIP). While it's common for them to seek relief from the driver, you might face vicarious liability if you engaged in negligent entrustment.
Under negligent entrustment, liability falls on you for giving the keys to someone you reasonably knew shouldn't be driving. This can include if the driver:
- Has a history of reckless driving
- Doesn't possess a legal driver's license
- Is under the influence of alcohol or drugs
Depending on the situation, you may face criminal charges for allowing someone to drive your car when you know that it's illegal, dangerous, or both. Civil lawsuits against you are likely in that situation as well.
You can also find yourself in legal hot water if you let someone drive your vehicle when you know it's defective. If a repair shop informed you that your tires were dry-rotted and a danger but you let your friend take the car anyway, an accident caused by a blowout can be ruled your fault.
With Friends Like That
Odds are you won't have issues lending your car to a friend that you trust, but it's a good idea to check your policy before doing so. If your friend takes your car without your permission, that's a different story when it comes to liability. You'll have to swear that you didn't agree to it and your friendship may suffer, but it will help remove liability from you.
There's little we won't do for our friends and family. Next time they want to borrow your pickup to move a few things, it might be worth it to play chauffeur instead.
Related Resources
- Negligence in Injury Law (FindLaw's Accident & Injury Law)
- Borrowed Car Accidents: Who Pays? (FindLaw's Car Accident Law)
- Auto Insurance Policy Coverage (FindLaw's Accidents and Legal Injuries Guide)
