From time to time, you might lend your vehicle to a friend. But before you do, you’ll want to make sure that you’re covered in case your friend is involved in an incident while using your vehicle.
One important question you should ask yourself is whether your insurance policy covers your friend when they take your car. The good news is that your car insurance policy likely will cover other drivers, as long as they have your permission. That said, there may be certain exceptions that you should be aware of.
Key Points
- If you lend your car to a friend, your insurance policy will provide protection in the event of an accident.
- Certain exceptions apply, such as those who don’t have a valid driver’s license or who are excluded from your policy.
- Car insurance follows the car, and not the driver. So, if your friend gets into an accident while driving your car, your policy will kick in.
Does Vehicle Insurance Cover The Car Or The Driver?
Generally speaking, car insurance follows the vehicle, not the driver. That means that your insurance policy will typically cover any driver who you’ve given permission to use your vehicle. That said, there are certain considerations to make:
- The Driver Must Have Your Permission: Insurance policies typically require that the driver has your permission to drive your car in order for coverage to apply.
- The Driver Must Have A Valid License: The person you lend your car to should hold a valid driver’s license in your province in order for your policy to extend coverage.
Find out if you should repair your car or buy a new one.
Non-Owner Car Insurance For Those Who Don’t Own A Vehicle
If borrowing your car becomes a regular occurrence, your friend might want to look into rental vehicle insurance (known as “non-owner coverage” in certain provinces), which covers damage to any vehicles they don’t own, including yours. There’s also province-mandated liability insurance, which extends to the other driver’s medical costs.
There are certain insurance policies that will also protect you or anyone who drives your car, so ask your insurance company about the extra features they offer before you buy your policy.
What Type Of Coverage Would Apply When A Friend Borrows My Car?
When you lend your car to a friend, certain types of coverage under your plan may apply:
| Coverage Type | What It Does |
| Liability Coverage | Covers damages or injuries caused to a third party if your friend is at fault in an accident. |
| Collision Coverage | Helps pay for repairs if your vehicle is involved in an accident, no matter who was driving or was at fault. |
| Comprehensive Coverage | Applies to non-collision-related incidents, including theft, vandalism, or natural disasters. |
| Uninsured/Underinsured Driver Coverage | Helps pay for damages or injuries if your friend is involved in an accident with an uninsured or underinsured motorist. |
What About Uninsured Vehicles?
Simply put, you cannot legally drive anyone’s car if they don’t have insurance, nor can they drive your vehicle if it’s uninsured, no matter where you or your friend live in Canada. In fact, if either driver gets pulled over or is involved in an accident, severe consequences may follow. Penalties may include thousands of dollars in fines, a suspended license, and even the car being taken to an impound lot, resulting in additional costs.
That said, you are allowed to drive someone else’s car if they have vehicle insurance, and vice versa. For example, someone who borrows your car occasionally would be covered by the right type of insurance policy. However, if they drive your car all the time, then it’s probably a better idea to add their name to your current policy.
Before you do this, make sure your secondary driver knows that your insurance company will ask them for various personal details, as well as their driver’s history to confirm that they meet insurability requirements. Luckily, if you’re driving an uninsured car, there are some scenarios where you’ll be partially covered by your own policy.
What If My Friend Has A Bad Driver’s History?
You may want to reconsider lending your vehicle to someone with a history of incidents. When you let someone borrow your vehicle, they’re essentially borrowing your clean driving record, too. So, if they get into an accident with your car, you could risk having your good driving record and claims history negatively affected.
What Happens If My Friend Gets Into An Accident?
If your friend gets into an accident while driving your car, your insurance will cover the damages, since car insurance typically follows the vehicle, not the driver. However, this can result in an increase in your premiums, which will make your policy more expensive. Plus, you may also have to pay any deductibles.
Further, since it’s your policy, you will be the one filing the claim. That means you’ll now have a claim on your record, despite the fact that you weren’t driving the vehicle. This can taint your driving record and can affect your policy.
Tips To Protect Yourself Before Lending Your Vehicle To A Friend
Before you hand the keys over to a friend, be sure to consider the following:
Understand Your Policy
Carefully review your car insurance policy to make sure you fully understand the details of what it covers, particularly when it comes to other drivers using your car.
Find Out If Your Friend Has A Policy
Your policy will cover you if your friend gets into an accident with your car, as mentioned. But if your friend has an insurance policy, including a non-owner car insurance policy, it may provide additional coverage if there are any damages that are more what your policy covers if they get into an accident with your vehicle.
Discuss Your Policy With Your Friend
Speak with your friend about certain aspects of your policy. For instance, if your friend is responsible for hitting another vehicle, your liability coverage insurance can only be applicable to both cars once your deductible is paid. If you expect your friend to pay, be sure to communicate your expectations.
Screen Drivers
Take the time to vet prospective drivers to make sure they’re responsible and have a clean driving record.
Consider Adding The Driver To Your Policy
If your friend frequently uses your vehicle, consider adding their name to your policy as a listed driver to avoid issues.
Bottom Line
Allowing a friend to borrow your car may help them out, but it can also be risky if you don’t take precautions. Most policies provide coverage to other drivers not named in your policy, as long as they have your permission. But specific restrictions may apply. Be sure to assess the situation carefully beforehand and discuss details with your friend to minimize risks.
