Typically, if you lend your car out to someone from time to time, and they have a driver’s license that is in good standing, your policy will provide the primary coverage in the event of an accident. If your friend has an insurance policy, their policy will likely only cover the amount over and above your coverage limits. However, all policies differ, and some might outline conditions for the coverage. If your policy is unclear, it is a good idea to contact your insurance broker so that he or she can go through the policy details with you.
“Keep in mind that when you lend out your car, you are also lending your car insurance”~Chad Mullen, Lane’s Insurance
Be sure to exercise caution when you are lending your vehicle to someone else. Keep in mind that when you lend out your car, you are also lending your car insurance. In the event of an accident, the claim will be charged to your policy, and your rates will increase the next time your annual contract is renewed, just as they would if you were the driver involved in the accident. If your friend has their own insurance, but borrows your car on a semi-regular basis, it might be a good idea for you to require your friend to obtain a obtain an SEF 27 or “Legal Liability for Damage to Non-Owned Automobile” endorsement on their insurance as a condition for lending them your car. That way, if they get in an accident, the claim will go against your friend’s insurance instead of yours.
