Most people have an idea of what’s covered and not covered under their various insurance policies. But at Partner Agency we get a lot of questions about borrowing or loaning a car.
There are a lot of reasons you may borrow a car: you could be having minor maintenance done on your vehicle, maybe you’re out of town visiting with family, or you might be looking to borrow a friend’s truck for a home-improvement project or a trip to the local landfill. Because this is not uncommon, we thought it was a great time to provide a little more information.
Where does coverage come from when I borrow a car?
Generally, insurance coverage follows the vehicle rather than the driver. So in most instances, as long as the owner of the car has insurance, it’s covered even if someone other than the owner is driving it — as long as they have the owner’s permission.
The borrower’s insurance is considered secondary, meaning that in the event of an accident, it could apply if the owner’s insurance is insufficient to fully cover the damage.
You’ll often hear the term “Permissive Use” when talking to an agent about borrowing or lending a car. Permissive use is the operation of a car with permission of the owner; this allows for coverage during the time the vehicle is in use by a non-listed driver.
Exceptions to Permissive Use
It’s important to note that there are some exceptions to what is called “permissive use” coverage. For example, permission must be given by the owner, unless the borrower has a reasonable belief that they are allowed to use the car (such as a child borrowing a parent’s car). However, the borrower cannot give permission to someone else. So if your teenager allows one of his or her friends to drive your car to the Brea Mall, your coverage likely won’t apply. Some companies ask that you add or exclude members of the household, in those cases where a driver is a resident and they are excluded, permissive use DOES NOT provide coverage for that excluded driver.
Coverage might also be denied if the borrower operates the vehicle in a negligent or criminal manner. It’s an extreme example, but say a person borrowed their parent’s car to rob a bank and gets into a car accident on the way home, using the vehicle in a criminal way could exclude coverage for the vehicle. And if the borrower is using your car for business purposes, your personal auto policy likely won’t cover that.
Long Term Use
“Permissive Use” is only meant to cover those infrequent occasions that you borrow a vehicle; if you have a regular long-term arrangement to either borrow or lend a car, the borrower should be added to the owner’s personal auto policy. Those who don’t own a car, but often borrow one, might also consider “named non-owner coverage,” this would provide the person who is borrowing the car bodily injury and property damage liability coverage, uninsured motorists coverage and more.
Ultimately, it’s usually safe to loan your friend your car for occasional errands or projects. And the same goes for borrowing a car. Just make sure it’s for “normal” use. You’ll want to confirm that the car has coverage and that the borrower has an active driver license.