Does my insurance cover a borrowed car?

If the borrowed car has insurance, you’re covered. If it doesn’t, then you’re not covered under your basic car insurance policy. Your car insurance policy covers your car, not you. That is, unless you have uninsured motorist coverage and the accident that happens is not your fault.

As for lending your car to someone, the car stays insured but you should be forewarned that lending your insured car should not be taken lightly. If an accident occurs and you have no choice but to file a claim, your premium will probably increase because your risk factor increases.

In addition, if the insurance company will investigate the driver using your car and if found having a bad driver’s record, could hold you liable for damages.  You could also be facing criminal charges for allowing a high risk driver on the road.

Related Content:

Full coverage frequently asked questions

What do I need to know about no down payment options?