Table of Contents
The cleanup from a car crash can be messy. It can get messier if you weren’t driving your car but a friend was behind the wheel. So who pays if your friend crashes your car?
Buckle up as we take you down the road of this potentially bumpy issue.
Car Insurance Normally Follows the Vehicle, Not the Driver
Auto insurance follows the car, not the driver. So, if you let a friend borrow your car, your own auto insurance, not your friend’s, will typically pay out for anything that might happen to your car or the driver during that time. For instance, your collision insurance probably will cover damage to your vehicle and your car third-party liability insurance can cover damage or injury to another driver that your friend causes.
Your insurance generally pays for your friend’s crash, as long as your friend is a licensed driver and doesn’t regularly borrow your car. (If they’re a regular driver of your car he or she needs to be listed on your policy as an occasional driver.)
Your friend’s insurance would be considered secondary coverage if your insurance limits are used up because damage and injury bills exceed your policy amounts.
Also, you may not even be responsible for damage or injuries arising from a wreck when your friend is behind the wheel of your car. If the crash isn’t the friend’s fault, the financial responsibility may rest with other drivers who are at fault.
Permissive vs. Non-Permissive Use
“Permissive use” simply means that your friend had permission to drive your car.
What happens if a friend borrows your car without your permission (known as non-permissive use)? In some instances, your friend’s auto insurance will kick in as the primary coverage—not your coverage. But if your friend has no auto insurance, you may need to turn your policy to cover damage or injuries.
Here’s another twist. Let’s say the wreck involving your friend causes catastrophic damage and your third-party liability insurance limit doesn’t cover it. In this situation, your friend’s auto insurance might have to make up the gap.
Even if your own auto insurance policy is enough to cover the entire bill for damage, your insurer might try to recover money from the friend’s auto insurance company—a process known as subrogation.
Other Reasons for Claim Trouble
If you let a friend borrow your car knowing they weren’t fit to drive—say they were drunk or had racked up numerous traffic violations—you might be held liable for damage or injuries connected to other motorists.
Furthermore, if your friend was texting while driving or otherwise breaking the law, your insurance company could deny a claim for damage or injuries associated with your car.
Insurance Rate Increases
Even if you weren’t in the car at the time, a wreck your friend causes in your vehicle may cause your auto insurance rates to go up at renewal time.
You could see an even bigger jump in your rates if your friend has been living in your home and has been regularly borrowing your car, but you didn’t inform your insurance company about this arrangement. The insurer will adjust the rates to properly reflect the drivers, or might pay the claim but cancel your policy.
The best strategy is to be very picky about who borrows your car.
Who Pays If Your Friend Crashes Your Car? FAQ
What's the difference between a primary driver and an occasional driver?
The primary driver is the person who typically drives a car the most, and is usually the registered owner of the car. An occasional driver may use the car on a semi-regular basis. For example, say your neighbour drives your child to soccer practice twice a week: She should be listed on your policy as an occasional driver. In most provinces, all licensed members in your household should be listed as an occasional driver, unless they have a car and an active car insurance policy of their own.
Can a friend with a learner's permit drive my car?
Each province and territory has its own set of rules for driving and licensing, but all use a graduated driver licensing (GDL) system where a driver progresses from a learner’s permit to a restricted licence, and finally a full licence. Drivers with a learner’s permit typically need to drive with another licensed driver. So your friend can drive your car, but you need to sit in the passenger seat. There may be other restrictions as well, depending on your province. For example, in Ontario you need to have at least four years of driving experience and have a blood-alcohol level of less than 0.05%.
What is an excluded driver?
Say a member of your household has a few convictions on their driving record, causing your insurance premiums to skyrocket. In certain provinces, such as Alberta and Ontario, you can name that person as an excluded driver on your policy and, in turn, your premiums will drop. However, if that driver uses your car and gets into an accident, the insurance company will not pay out and you are then personally responsible for any claims.
