Car insurance typically follows the vehicle, not the driver. This means that if you lend your car to someone else and they get into an accident, your insurance company would likely be responsible for paying the claim. However, several factors come into play when determining whose car insurance applies if someone gets in a car accident in a borrowed car.
Are You Insured if Someone Else Drives Your Car?
In almost all situations, if you lend your car to someone and they damage your vehicle in an accident, your insurance will pay. Coverage will depend on your specific policy, liability, and coverage limits. Generally, you are insured when someone else drives your car if:
- The driver has a valid license to drive in Canada and is legally allowed to drive in the province or territory.
- You have given your verbal or written permission that the person can drive your vehicle.
- The driver sticks to the rules of your policy. For instance, most private insurance policies include a non-commercial clause and will not cover damages if the accident occurred while the car was being used for business purposes.
- The driver is using your vehicle on an infrequent basis.
- The driver is not listed as excluded from your policy.
Suppose the driver does not have a valid license, or they participate in illegal activity. In that case, your insurance company will likely not provide coverage. Some insurance policies will also not cover any driver that is not named in the policy.
I Totaled Someone Else’s Car – Now What?
Following an accident, the first thing you should do is check yourself and any passengers for injuries. The next step is to call 911 as soon as possible and seek medical attention. Be sure to get copies of medical and police reports. If possible, take videos and photos to document the scene, vehicle damages, and injuries. You will need to exchange insurance information with all other drivers involved in the accident, regardless of who is at fault.
When driving someone else’s car, you would be covered under their insurance policy. This assumes you follow the same rules that apply to someone borrowing your vehicle (listed above). If you get into an accident while driving someone else’s car, you will need to present proof of insurance. You should make sure that you have this before borrowing the vehicle.
You will also want to see proof of insurance for the vehicle you are borrowing. If the car’s owner does not have insurance and you are at fault for the accident, the claim will be processed through your auto policy. However, some limitations may apply to the coverage provided when driving a car owned by someone else.
Insurance Coverage & Liability
In Nova Scotia, all licensed vehicle owners must carry auto liability insurance. This coverage is extended to any person with a valid driver’s license that operates your vehicle with your permission. Liability insurance is designed to protect drivers from being sued for a physical injury or damage to someone else’s property. The minimum coverage required by law is $500,000. When someone borrows your car and causes an accident, any claims for damages by other parties are made against your insurance policy. If the cost of losses or damages caused by the accident is more than your policy limit, you may be personally responsible for paying the balance.
While you are legally allowed to lend your car to someone, insurance companies may use this as a reason to deny your claim. If you fail to list a driver that your insurer requires to be on the policy, and they are responsible for an accident, your claim may be denied. For example, if someone in your household borrows your car once a week but is not listed on your policy, your insurer may interpret this as not following the rules set out in your policy. The result could be denied compensation or cancelling your policy entirely.
Who should be listed on your insurance policy?
Most people do not want to list multiple drivers on insurance policies to avoid increasing their premiums. While insurers look at a variety of factors when setting rates, listing additional drivers could improve your chances of a successful claim if someone else gets into an accident while driving your car. If a driver matches any of the definitions below, it is worth asking your insurance agent if they should be added to your policy.
- Primary Driver: The person who regularly drives the vehicle. Every car is assigned to a primary driver.
- Secondary Driver: Anyone who uses your car on a regular or semi-regular basis.
- Occasional Driver: Someone who drives your car periodically, no more than 50% of the time.
- Incidental Driver: Someone who borrows your car and does not operate it regularly.
In most cases, insurance policies will cover insured drivers that meet the definition of “permissive use”. Permissive use refers to giving someone who is not listed on your policy permission to drive your vehicle periodically. The definition for periodically might differ between policies but typically means less than 12 times a year.
Whose liability will cover the driver?
When you lend your vehicle to someone, you are also lending your insurance coverage. If another driver causes an accident in your car that injures someone else or damages their property, your car insurance acts as the primary coverage. The general rule of thumb is an auto insurance policy follows the car, but there are instances when the policy will follow the driver.
Primary liability coverage is the car owner’s insurance policy. The injuries or damages caused by the collision may exceed the coverage provided by the owner’s policy. In this situation, the driver’s insurance policy may be tapped for secondary liability coverage to pay for the remaining costs. Alternatively, the car owner may be held personally liable for covering the remaining costs, putting all personal assets at risk.
Coverage for medical expenses typically follows the driver, regardless of who is at fault for the accident. This coverage is mandatory in Nova Scotia and referred to as Section B or Accident Benefits. Injured car accident victims can claim up to $50,000 under Section B over a period of four years, whichever comes first. These benefits cover the costs for medical treatment, rehabilitation, death benefits, income replacement, housekeeping, and funeral expenses.
If someone takes your car without your consent and gets into an accident, their insurance may be considered primary liability coverage. If your car is stolen and causes a car crash, you will likely not be held liable for damages. You may still need to file a claim with your insurance provider to cover your vehicle repairs.
If the person driving your car is not responsible for causing the accident, the claim is usually processed through the at-fault driver’s insurance. You should contact your own insurance company immediately after an accident, even if the person driving your car is not at fault. This will provide your insurance adjuster with details to process a claim through the other driver’s car insurance to avoid delays in recovering compensation.
How a car accident lawyer can help
Car accident claims can get confusing, especially when they happen in a borrowed car. Insurance companies are trained to get you the lowest payout possible, making it more difficult to recover the compensation you deserve. If you have been injured in a car accident, regardless of who is at fault, you are entitled to payment for your damages and losses.
Most drivers that get into a collision in a borrowed car handle the insurance claims process alone. Not only can this significantly reduce the settlement offer, but you may also qualify for benefits you aren’t aware of. Both of these outcomes will negatively impact your financial and physical recovery.
A car accident lawyer will examine the details of your case and ensure you have the proper paperwork to improve your chances for a successful claim. A lawyer will also navigate the insurance process for you, negotiating with insurance companies and fighting for your rights in court to get you the settlement you are entitled to.
Have questions about your car insurance claim? Our team of car accident lawyers at Valent Legal will review your case for free. Our firm also works on a contingency fee basis, which means we don’t get paid until you get a settlement or win a judgement in court.