Most people have an idea of what’s covered and not covered under their various insurance policies. But at Berkshire Insurance Services, we get a lot of questions about borrowing or loaning a car and if Auto Insurance covers it.
You might be thinking about borrowing your neighbor’s truck for a home-improvement project. Or maybe a friend has asked to borrow your car while hers is in the shop. You should understand the implications if one of those borrowed vehicles is involved in an automobile accident.
Generally, insurance coverage follows the vehicle rather than the driver. So, in most instances, as long as the car owner has insurance, it’s covered. Therefore, even if someone other than the owner is driving the vehicle, whatever insurance coverage is on the car should apply. That is as long as the driver has the owner’s permission.
The borrower’s insurance is considered secondary. Therefore, in the event of an accident, it could apply if the owner’s insurance is insufficient to cover the damage fully.
Exceptions
It’s important to note that there are some exceptions to what is called “permissive use” coverage. For example, the owner must give explicit permission unless the borrower has a reasonable belief that they are allowed to use the car. However, the borrower cannot give permission to someone else. So, if your teenager allows one of his or her friends to drive your vehicle, your coverage probably won’t apply.
You may also be denied coverage if the borrower operates the vehicle in a negligent or criminal manner. And if the borrower is using your car for business purposes, your personal auto policy likely won’t cover that.
If you have a regular long-term arrangement to either borrow or lend a car, you should probably add the borrower to the owner’s personal auto policy. Those who don’t own a car but often borrow one might also consider “named non-owner coverage.” This is an endorsement that provides bodily injury and property damage liability, uninsured motorists coverage, and more.
Ultimately, it’s usually safe to loan your car for occasional errands or projects. And the same goes for borrowing a car. Just make sure it’s for “normal” use. You’ll want to confirm that the car has coverage and that your insurance, whether you’re the owner or borrower, will apply.
Berkshire Insurance Services is happy to answer all of your insurance questions. Please, give us a call at 610-376-7300 if you have any questions. After all, you don’t want to wait until after an accident to get answers!
Call us