Lending an automobile to a friend can be a simple favor if it is returned in good shape. But things can get complicated when there are injuries and damages as a result of an accident caused by an occasional driver. Then there will be many questions and concerns as to whose insurance compensates those people and own vehicle repairs. This post will try to make sense of such cases and explain how it works and why.
As a general rule the vehicle owner’s policy is always primary when it is involved in an accident. Therefore, your insurance pays for the damages and injuries caused by a friend who borrowed the auto, providing you have coverage for this type of usage. A standard policy would normally include occasional use by someone else but the coverage can depend on terms and his or her age. Sometimes, there may be age restrictions and exclusions, especially if it is a sports car.
If the occasional driver (a friend who isn’t listed) has own insurance, it would provide secondary liability only coverage, which pays when the primary (vehicle owner’s policy) is exhausted. For example, if it has only $30,000 injury limit and the claim is for $40,000 the secondary may pay for the shortfall of $10,000.
How the Claim Goes down if Someone Borrows and Crashes my Car?
Underwriters always note the fact that they had to spend money for you, regardless of circumstances. The consequent losses will go down as a claim on your policy. Every company has a unique way of measuring them. This is not going to be noted as an at fault claim, especially if the friend is not listed on the schedule.
If you didn’t cause the loss and your and other listed drivers’ records are still clean you can still get discounts for it. However, the carrier will have to make you pay for their losses and apply a surcharge for the incident. Generally, these two things are considered separately and while one decreases costs the other can raise.
Does my Insurance Premium Rise if Someone Else Crashes my Car?
It will still affect rates for at least next three years. It will be a bit more so if it is a sizeable one than just a dent. How much automobile insurance will go up will depend on many factors, including state rules, records and the carrier.
You will have to wait and see the renewal quote. There are many factors that go into rate calculations like age, gender, zip code, type of automobile and credit score. Increase in rates may as well be further aggravated because of one of the factors.
Once you get the renewal notice you could talk to the person about the increase and see if he is willing to contribute towards it to compensate for causing the accident. In any case, such at fault driver should at least cover the deductible. But this is all depend on level of relationship. Friends borrow many things from each other and they usually mean to return them in good working order. But things sometimes happen even you are very careful.