Have you ever loaned out your car to a friend or family member only to wonder, “Will their auto insurance pay for an accident if they cause one?” If you’re like most insured drivers, this has entered your mind before and there’s a good chance you weren’t exactly
sure of the right answer. After all, your friend or relative may have even said, “Don’t worry, I have insurance!” But did that statement offer real peace of mind?
Contrary to popular belief, car insurance follows the car, NOT the driver. So, if you were to loan your truck to your friend so he or she could move on a Saturday and they caused a crash, YOUR auto insurance would be the first to kick in, not theirs. This means you would have to pay your deductible and you could face higher premiums after the claim is paid.
If you’re thinking about loaning your car to your mom to drive your kids to school, or to your sister while her car is in the shop, or to your friend while he or she goes on a weekend trip, remember, you’re not just loaning out your car, you’re loaning out your insurance.
What Texas Says About It
According to the Texas Department of Insurance “You and your family members might be covered when driving someone else’s car – including a rental car – but not a car that you don’t own but have regular access to, such as a company car. Some policies provide only liability coverage when you drive a car you don’t own. Physical damage coverage for damage to the unowned vehicle might not transfer. Ask your agent before renting a car or driving a car you don’t own or lease.
“Some policies – called named driver policies – won’t cover people who live with you, including family members, unless they’re specifically named in the policy. For these policies, the declarations page must list the names of the people the policy covers.”
We hope this clears up any questions that you had about loaning your vehicles to others and what happens if they are ever in a crash in your car. To file a car accident claim in Plano, Dallas, or Fort Worth, please contact our firm immediately for assistance.