Lending your car

The general rule

Coverage in auto insurance typically follows the vehicle rather than the driver. A friend who borrows your car with permission is generally covered by your policy, which pays first if they cause an accident.

Your policy, your limits, your deductible, and your claims record. That last part is the piece people don't think about until afterwards.

Where it stops applying

• A household member who should be listed on the policy and isn't
• Someone formally excluded by a named driver exclusion
• Regular use rather than occasional borrowing — a car someone drives most days is generally expected to be rated for them
• Use for business or delivery, which many personal policies exclude
• Driving without a valid licence, or while impaired
• Use without your permission

The consequences land on you

Your policy limits apply, not theirs. If the accident exceeds your limits, the injured party can pursue the driver and potentially you as the vehicle owner.

The claim also attaches to your policy and can affect your rate, even though you weren't driving.

Before lending it

• Confirm they're licensed and insured themselves
• Ask whether they'd be driving for work in any capacity
• Check your own liability limits, since they're what applies
• Don't lend it to a household member who isn't listed — sort the listing instead
• For anything regular rather than occasional, add them properly

Policy language varies

Permissive use terms differ between policies and states, including how "regular use" is defined. Read your own policy's language on who is an insured driver rather than relying on the general rule.

If you lend the car often, that's a five-minute call to your insurer worth making.