What Occurs if Another Person Crashes Your Vehicle?

If you’re like most people, you’ve probably borrowed or lent a car at some point in your life. Maybe you needed to run an errand, or your friend asked you to drive them somewhere. Whatever the reason, it’s important to understand how auto insurance works when someone else is driving your car, or when you’re driving someone else’s car.

In this article, we’ll explain what occurs if another person crashes your vehicle, who pays the deductible, what if you don’t have enough coverage, and whether your insurance will cover someone not on your policy. We’ll also discuss what happens if you wreck a borrowed car, and why you might want to consider your own policy if you don’t own a car.

What Happens if Someone Else Crashes Your Car?

It depends on several factors, such as:

  • Whether you gave permission for the person to drive your car
  • Whether the person is at fault or not at fault for the accident
  • Whether the person has their own insurance policy
  • Whether your policy has enough coverage for the damages and injuries

Let’s look at some common scenarios and how they affect your insurance coverage.

Borrowing Your Car

If you borrow someone’s car with their permission, you’re usually covered by their insurance policy. This means that if you cause an accident, their liability coverage will pay for the damages and injuries to the other party. However, their collision coverage will only pay for the repairs to their car if they have it. If they don’t have collision coverage, or if their deductible is too high, you may have to pay out of pocket for the damages to their car.

Lending Your Car

If you lend your car to someone with your permission, you’re usually responsible for any damages or injuries that result from an accident. This means that your liability coverage will pay for the damages and injuries to the other party, and your collision coverage will pay for the repairs to your car (if you have it). However, if the person driving your car has their own insurance policy, it may act as secondary coverage in some cases. This means that their policy may cover some of the costs that exceed your policy limits or deductible.

Permissive Use Concept

The key concept here is permissive use. Permissive use means that you gave permission for a valid driver to use your car. If you did, then your insurance policy will usually cover them as a permissive user. However, there are some exceptions and limitations to this rule.

For example, some insurance companies may not cover permissive users who are not related to you or who live with you. Some may also not cover permissive users who use your car for business purposes or who drive it frequently. Some may also have lower coverage limits or higher deductibles for permissive users.

Coverage Nuances

Another factor that affects your coverage is whether the person driving your car is at fault or not at fault for the accident.

  • Not At Fault Accidents – If the person driving your car is not at fault for the accident, then the other driver’s liability coverage should pay for the damages and injuries. However, if the other driver is uninsured or underinsured, then you may have to rely on your own uninsured/underinsured motorist coverage (if you have it) to cover the costs. This type of coverage pays for your damages and injuries when the other driver is legally responsible but doesn’t have enough insurance or any insurance at all.
  • At-Fault Accidents – If the person driving your car is at fault for the accident, then your liability coverage should pay for the damages and injuries to the other party. However, if your liability limits are too low to fully cover the costs, then you may be personally liable for the excess amount. This means that you may have to pay out of pocket or face a lawsuit from the other party.

Importance of Reading Policy Documents

As you can see, there are many nuances and exceptions when it comes to insurance coverage when someone else crashes your car. That’s why it’s important to read your policy documents carefully and understand what’s covered and what’s not. You should also check with your insurance company before lending or borrowing a car to make sure you’re protected in case of an accident.

Who Pays the Deductible?

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A deductible is the amount of money you have to pay out of pocket before your insurance company pays for a claim. For example, if you have a $500 deductible and a $2,000 claim, then you have to pay $500 and your insurance company pays $1,500.

Collision Coverage and Paying for Repairs

If someone else crashes your car and causes damage to it, then you may need collision coverage to pay for the repairs. Collision coverage is optional and pays for damage to your own car regardless of who’s at fault. However, collision coverage comes with a deductible that you have to pay before your insurance company pays for the rest.

Responsibility for the Deductible

The question is, who pays the deductible when someone else crashes your car? The answer depends on the situation and the agreement between you and the person driving your car.

If you gave permission for the person to drive your car, then you’re usually responsible for the deductible. This is because your insurance policy covers them as a permissive user, and you agreed to lend them your car. However, you may ask them to reimburse you for the deductible or split the cost with you, depending on your relationship and the circumstances of the accident.

If you didn’t give permission for the person to drive your car, then they’re usually responsible for the deductible. This is because they’re not covered by your insurance policy, and they took your car without your consent. However, you may have to sue them or file a claim with their insurance company (if they have one) to recover the deductible from them.

Potential Discussions Between Car Owner and Borrower

As you can see, paying the deductible can be a tricky and sensitive issue when someone else crashes your car. That’s why it’s important to have clear and honest discussions with the person driving your car before and after lending or borrowing it. You should also have a written agreement that specifies who pays for what in case of an accident.

What if You Don’t Have Enough Coverage?

Another scenario that can happen when someone else crashes your car is that you don’t have enough coverage to pay for all the damages and injuries. This can happen if the person driving your car causes a serious accident that exceeds your policy limits.

Exceeding Policy Limits in an At-Fault Accident

Your policy limits are the maximum amount of money that your insurance company will pay for a claim. For example, if you have $25,000/$50,000/$25,000 in liability coverage, then your insurance company will pay up to $25,000 per person, $50,000 per accident for bodily injury, and $25,000 per accident for property damage.

If the person driving your car causes an accident that results in $40,000 in bodily injury per person, $80,000 in bodily injury per accident, and $30,000 in property damage, then your insurance company will only pay up to your policy limits. This means that you’ll be left with $15,000 in excess bodily injury per person, $30,000 in excess bodily injury per accident, and $5,000 in excess property damage. In total, you’ll be liable for $50,000 out of pocket or more if there are multiple injured parties.

Secondary Coverage Options

If you don’t have enough coverage to pay for all the damages and injuries when someone else crashes your car, then you may have some secondary coverage options to help you out.

  • Borrower’s Insurance – One option is to rely on the borrower’s own insurance policy (if they have one). Some insurance companies may provide secondary coverage for their customers when they drive someone else’s car. This means that their policy may kick in after your policy reaches its limits and cover some or all of the remaining costs. However, this depends on their policy terms and conditions, and whether they have enough coverage themselves.
  • Personal Liability Policy – Another option is to have a personal liability policy or an umbrella policy. This is a type of coverage that provides extra protection beyond your auto insurance policy. It covers you for any liability claims that exceed your auto policy limits or other types of policies (such as homeowners or renters insurance). It also covers you for some liability claims that are not covered by your auto policy (such as slander or libel).
  • Personal Liability for Expenses Beyond Policy Limits – If you don’t have any secondary coverage options when someone else crashes your car and causes damages and injuries beyond your policy limits, then you may be personally liable for the expenses. This means that you may have to pay out of pocket or face a lawsuit from the other party or their insurance company. This can have serious financial consequences for you and affect your credit score and assets.

Will Your Insurance Cover Someone Not on Your Policy?

car-insurance

One of the most common questions people ask when lending or borrowing a car is whether their insurance will cover someone not on their policy, such as:

  • Whether you gave permission for the person to drive your car
  • Whether the person is a licensed and valid driver
  • Whether the person is excluded from your policy
  • Whether the person drives your car regularly or occasionally

Permissive Use Requirement

As we mentioned earlier, one of the main factors that determines whether your insurance will cover someone not on your policy is whether you gave permission for them to drive your car. This is known as permissive use, and it’s a requirement for most insurance policies to cover someone not on your policy.

However, permissive use doesn’t mean that anyone can drive your car with a simple verbal agreement. There are some restrictions and limitations that apply to permissive use.

Restrictions on Lending to Unlicensed or Impaired Drivers

One of the restrictions on permissive use is that you can’t lend your car to someone who is unlicensed or impaired. This means that if you let someone drive your car who doesn’t have a valid driver’s license, or who is under the influence of alcohol or drugs, then your insurance won’t cover them in case of an accident.

This is because lending your car to an unlicensed or impaired driver is considered a negligent act, and it violates the terms and conditions of your insurance policy. If you do so, you may be personally liable for any damages or injuries that result from an accident.

Excluded Drivers on Your Policy

Another restriction on permissive use is that you can’t lend your car to someone who is excluded from your policy. An excluded driver is someone who you specifically named as someone who can’t drive your car under any circumstances. This may be because they have a bad driving record, a history of accidents or claims, or a high-risk profile.

If you lend your car to an excluded driver, then your insurance won’t cover them in case of an accident. This is because you agreed to exclude them from your policy when you signed it, and you violated that agreement by letting them drive your car. If you do so, you may be personally liable for any damages or injuries that result from an accident.

Adding Authorized Drivers for Regular Use

On the other hand, if you want to lend your car to someone who drives it regularly or frequently, then you may want to add them as an authorized driver on your policy. An authorized driver is someone who you specifically named as someone who can drive your car with your permission. This may be because they are a family member, a friend, or a co-worker who shares your car.

If you add someone as an authorized driver on your policy, then your insurance will cover them in case of an accident. This is because you agreed to include them on your policy when you signed it, and you paid an extra premium for them. However, adding an authorized driver may also affect your rates and discounts, depending on their driving record and risk profile.

What Happens if You Wreck a Borrowed Car?

If you borrow someone’s car and get into an accident, you may be wondering what happens next. Who pays for the damages and injuries? Whose insurance covers the claim? How will this affect your driving record and insurance rates?

  • Whether the car owner gave you permission to drive their car
  • Whether you are at fault or not at fault for the accident
  • Whether you have your own insurance policy
  • Whether the car owner has enough coverage for the damages and injuries

Let’s look at some common scenarios and how they affect your insurance coverage.

Car Insurance Follows the Car, Not the Driver

The first thing to understand is that car insurance follows the car, not the driver. This means that when you borrow someone’s car, you’re usually covered by their insurance policy, not yours. This applies to both liability and collision coverage.

Liability coverage pays for the damages and injuries that you cause to another party in an accident. Collision coverage pays for the damage to the car that you’re driving, regardless of who’s at fault.

Coverage for At-Fault and Not-At-Fault Accidents

The second thing to understand is that your coverage depends on whether you are at fault or not at fault for the accident.

If you are not at fault for the accident, then the other driver’s liability coverage should pay for the damages and injuries. However, if the other driver is uninsured or underinsured, then you may have to rely on the car owner’s uninsured/underinsured motorist coverage (if they have it) to cover the costs. This type of coverage pays for your damages and injuries when the other driver is legally responsible but doesn’t have enough insurance or any insurance at all.

If you are at fault for the accident, then the car owner’s liability coverage should pay for the damages and injuries to the other party. However, if their liability limits are too low to fully cover the costs, then they may be personally liable for the excess amount. This means that they may have to pay out of pocket or face a lawsuit from the other party or their insurance company.

Own Insurance Policy as Secondary Coverage in Certain Cases

The third thing to understand is that your own insurance policy may act as secondary coverage in certain cases. This means that your policy may kick in after the car owner’s policy reaches its limits and cover some or all of the remaining costs. However, this depends on your policy terms and conditions, and whether you have enough coverage yourself.

For example, some insurance companies may provide secondary liability coverage for their customers when they drive someone else’s car. This means that if you cause an accident that exceeds the car owner’s liability limits, then your policy may pay for the excess amount. However, this may also affect your rates and discounts, depending on your driving record and claim history.

Another example is that some insurance companies may provide secondary collision coverage for their customers when they drive someone else’s car. This means that if you damage the car that you’re driving and the car owner doesn’t have collision coverage or has a high deductible, then your policy may pay for the repairs. However, this may also affect your rates and discounts, depending on your driving record and claim history.

Personal Injury Protection (PIP) and Medical Payments (Medpay)

The fourth thing to understand is that personal injury protection (PIP) and medical payments (Medpay) are types of coverage that pay for your own medical expenses in an accident, regardless of who’s at fault. PIP also covers other expenses, such as lost wages and funeral costs. Medpay only covers medical expenses.

These types of coverage are optional in most states, but mandatory in some. They are usually part of your own insurance policy, not the car owner’s policy. However, some states allow PIP or Medpay to follow the driver, not the car. This means that if you borrow someone’s car and have PIP or Medpay on your own policy, then you may be covered by it in case of an accident.

However, this also depends on your policy terms and conditions, and whether there are any exclusions or limitations. For example, some policies may not cover PIP or Medpay when you drive someone else’s car without their permission, or when you drive a rental car or a commercial vehicle. You should always check with your insurance company before borrowing or lending a car to make sure you’re covered by PIP or Medpay.

Consider Your Own Policy

consider-your-own-policy

If you don’t own a car, but you still drive occasionally, you may want to consider getting your own policy. This can provide you with more coverage and protection than relying on someone else’s policy or the rental company’s policy. Here are some benefits of having your own policy:

Non-owner auto insurance for those who don’t own cars

Non-owner auto insurance is a type of policy that provides liability coverage for people who don’t own a car but often drive cars owned by others. A non-owner policy covers injuries and damages to others if you cause an accident in a borrowed or rented car and is secondary to the owner’s policy. Non-owner insurance can be helpful if the car owner’s liability limits are too low to fully cover the incident, or if you’re denied coverage under the owner’s policy.

Liability coverage for driving other people’s cars

Liability coverage is the most basic and essential type of car insurance. It pays for the damages and injuries that you cause to another party in an accident. Liability coverage is required by law in most states, and it follows the car, not the driver. This means that when you drive someone else’s car, you’re usually covered by their liability policy. However, their liability policy may not be enough to cover all the costs, especially if they have low limits or high deductibles. Having your own liability policy can give you extra protection and peace of mind when driving other people’s cars.

Adding additional coverage options

Besides liability coverage, you may also want to add some additional coverage options to your own policy. These can include:

  • Uninsured/underinsured motorist protection, which pays for your injuries after an accident caused by a driver without any or enough liability insurance.
  • Medical payments or personal injury protection, which pay for your injuries after a wreck no matter who’s at fault.
  • Rental reimbursement, which pays for the cost of renting a car while your borrowed or rented car is being repaired after an accident.

These types of coverage are optional in most states, but they can provide you with more financial security and convenience when driving someone else’s car.

Cost-effectiveness of non-owner policies

Non-owner car insurance typically costs less than what you’d pay for the same level of liability coverage on a car you own, but this may vary depending on your driving history, location, coverage limits, and other factors. However, non-owner insurance may be more cost-effective than paying for the rental company’s liability insurance every time you rent a car. It may also save you money in the long run if you cause an accident that exceeds the car owner’s policy limits or deductible.

To find out how much non-owner car insurance would cost you, you can get a quote online or call an insurance agent. You should compare different policies and options to find the best deal for your needs.

Conclusion

Driving someone else’s car or letting someone drive your car can be a common and convenient practice, but it can also involve some risks and complications. That’s why it’s important to understand how insurance coverage works when borrowing or lending cars, and what factors affect your coverage and liability.

By knowing the basics of permissive use, policy limits, deductibles, secondary coverage, and additional coverage options, you can ensure your financial protection when driving someone else’s vehicle. You can also avoid unpleasant surprises and disputes in case of an accident.

You should also consider getting your own policy if you don’t own a car but drive occasionally. This can provide you with more coverage and protection than relying on someone else’s policy or the rental company’s policy. It can also save you money and hassle in the long run.

Remember, car insurance is not only a legal requirement, but also a smart investment. It can protect you from financial losses and legal troubles when driving someone else’s car or letting someone drive your car. So, make sure you have enough coverage and read your policy documents carefully before lending or borrowing a car.

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