Loaning Your Vehicle: What to Do If Someone Gets Into an Accident With Your Car

Loaning your car to a friend or family member may seem like a simple favor, but it comes with significant legal and financial risks. 

Many vehicle owners don’t realize that when they lend their car, they also lend their insurance policy. If the driver gets into an accident, you could be held responsible for damages and liabilities. 

Below you can find everything you need to know about loaning your car. Remember, when the unexpected happens, you can contact Morgan & Morgan for help. It costs nothing to reach out to us and learn about your legal options.

Should I Loan My Car to a Friend?

Before lending your vehicle, consider the risks and responsibilities involved. Ask yourself:

• Does the person have a valid driver’s license and a good driving record?
• Do they have their own insurance policy that could provide secondary coverage?
• Are you comfortable with the potential consequences if they get into an accident?
• Can you afford potential increases in your insurance premiums?

If you have any doubts, it may be best to politely decline or explore alternative transportation options for them.

Who Is Responsible if Someone Else Wrecks My Car?

Insurance Follows the Car

Auto insurance typically follows the car, not the driver. This means that if you lend your car to someone and they cause an accident, your insurance policy is the primary coverage. The driver’s personal insurance may act as secondary coverage, but this depends on their policy and the circumstances of the accident.

Primary vs. Secondary Coverage:

• Your insurance policy will generally cover damages up to your policy limits.
• If the damages exceed your coverage, the driver’s insurance may cover the remaining costs.
• If the driver is uninsured or underinsured, you could be personally liable for excess damages.

Permissive vs. Non-Permissive Use

Most state laws differentiate between permissive and non-permissive use:

• If the driver had your explicit or implied permission to use the car, your insurance should cover the accident.
• If the driver took your car without permission, their insurance (if applicable) may be liable, but you may need to prove that you did not authorize their use of the vehicle.
• If the driver is excluded from your policy, your insurance likely will not cover the accident.

What Should I Do if I Loan My Car and an Accident Happens?

If someone you loaned your car to gets into an accident, follow these steps:

1. Ensure Safety and Medical Attention

If you receive a call that your car was involved in an accident, advise the driver to:

• Check for injuries and call 911 if medical attention is needed.
• Move to a safe location, if possible.
• Report the accident to local law enforcement.

2. Gather Information at the Scene

Ensure the driver collects:

• Names and contact information of all involved parties.
• Insurance details of other drivers.
• Vehicle descriptions and license plate numbers.
• Police report number and officer’s contact details.
• Photos of the accident scene, vehicle damages, and any relevant road conditions.

3. Contact Your Insurance Company

• Notify your insurance provider immediately.
• Provide accurate details about who was driving and the accident circumstances.
• Follow their guidance on claims processing.

4. Determine Fault and Liability

Different states have various laws regarding fault and who can be held liable. An experienced attorney can assist you with how to prove fault, using key evidence, witness statements, and even expert analysis.

5. Contact Morgan & Morgan

Get a free case evaluation with the legal team of experts at Morgan & Morgan to ensure you’re taking your next best steps after a car accident. We can help you to determine fault, negotiate with insurance companies, and fight to get you compensated.

How Insurance Handles Vehicle Accidents

Collision Coverage and Liability Insurance

• Liability Insurance: Covers damages and injuries to the other party if your driver was at fault.
• Collision Coverage: Pays for repairs to your vehicle, minus the deductible.
• Uninsured/Underinsured Motorist Coverage: Protects if the at-fault driver has no or inadequate insurance.

Will Your Premiums Increase?

If your driver was at fault, your insurance premiums could increase upon renewal. However, if the other driver was at fault, their insurance should cover the damages, and your premiums may not be affected.

When Should I Contact a Lawyer?

In some cases, handling an accident through insurance isn’t enough. You should consult a lawyer if:

The Accident Involves Serious Injuries or Death

If the accident caused severe injuries or fatalities, a lawyer can help navigate liability issues and potential lawsuits.

Insurance Denies or Delays Your Claim

Insurance companies may deny coverage based on policy exclusions or claim disputes. A lawyer can fight for your rights and ensure a fair settlement.

You’re Being Sued for Damages

If the other party sues you or the driver of your car, legal representation is crucial to protect your financial interests.

The Other Driver Is Uninsured or Underinsured

If the at-fault driver lacks sufficient insurance, your lawyer can explore legal avenues to recover damages.

There Are Disputes Over Permission or Coverage

If your insurer claims the driver was not permitted to use your car, legal counsel can help dispute the denial.

How to Protect Yourself Before Loaning Your Car

1. Verify the Driver’s Insurance and Record

Before lending your car, check if the driver has their own insurance and a clean driving record.

2. Understand Your Policy’s Exclusions

Review your insurance policy to determine who is covered and any restrictions on vehicle use.

3. Consider Adding Restrictions or Exclusions

If you have concerns about certain drivers using your car, consider adding an exclusion to your policy.

4. Set Clear Expectations

Inform the driver about their responsibilities, including safe driving and reporting any incidents immediately.

When Accidents Happen, Morgan & Morgan Can Help

Loaning your vehicle carries legal and financial responsibilities. If the driver gets into an accident, your insurance will likely be the primary coverage. Knowing how to handle insurance claims, when to involve a lawyer, and how to protect yourself before lending your car can save you from costly consequences. 

If you face legal challenges, however, consulting an experienced attorney at Morgan & Morgan can help safeguard your rights and finances.

If you or someone you know is dealing with the aftermath of a car accident, contact Morgan & Morgan for a free case evaluation today.