23

If you have a friend visiting from out of state and you let them drive your car to a museum or something, as a one-off thing, I think it's a little impractical to let your insurance provider know that your friend is driving the vehicle, but practicality aside, would informing them be the proper thing to do?

Like what happens if your friend is driving your vehicle and they get in an accident? If there was a serious threat of that then letting the insurance company know might be prudent, but then again, maybe just not lending the vehicle to my friend would be just as prudent (and would eliminate the issue). But then again, it seems to me that insurance is something you get not because something is probable but because something is possible.

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    Read your policy; it very likely addresses this. – Nate Eldredge Sep 28 '16 at 14:57
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    What country are we talking about? – Dheer Sep 28 '16 at 15:07
  • @Dheer - United States. I added that as a tag – neubert Sep 28 '16 at 16:06
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    In the UK, this works the other way round: if your friend has valid motor insurance on his/her own car, then his/her policy will probably state that he/she can legally drive any other car with the owner's permission, but he/she is only covered for the minimum legal requirement of third party insurance. In other words if your car is damaged the insurance company won't pay anything. Whether you want to take that risk is your decision, of course. (Source: personal experience - a friend drove to a hospital for emergency treatment, which resulted in him being unable to drive his car back home). – alephzero Sep 28 '16 at 20:26
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    @alephzero is right for the UK, though "probably" may be putting it too strongly. This tends to be an optional extra on the cheapest policies, built-in on comprehensive policies. If the owner has comprehensive insurance that will cover most if not all of the things the the borrower's insurance doesn't -- read the small print. – Chris H Sep 29 '16 at 8:02
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Most of this content is gleaned from Geico's website:

There is no need to notify the insurance company about this situation, however there are some rules and liabilities to be aware of before you lend the car to someone. In case of an accident, your insurance will be used meaning YOUR deductible and, if damages exceed your coverage, you could be liable for additional damages.

According to Geico, a large US-based insurer handling 10.8% of the market, "you should ask a few more questions before letting another driver head into the sunset in your vehicle—or before borrowing someone else’s ride."

If you’re loaning out your car, ask:

Is the borrower licensed to drive? If they’re visiting from out of state, you don’t need to worry. If they have a driver’s license from another country, check your state’s requirements—the driver may need to apply for an International Driving Permit before he or she arrives in the U.S.

Does the borrower have a good driving record? If they have a history of fender benders and you keep your vehicle in pristine condition, it’s OK to not hand over the keys.

Is my insurance up to date? Every state requires a minimum level of auto insurance coverage, and some stipulate that in case of an accident, the car owner’s auto insurance—not the driver’s—provides primary coverage. (So if the driver rear-ends someone or bumps another car in a parking lot and your insurance has lapsed, you could be liable for damages.) Depending on your state’s regulations, you may also want to verify whether the driver has his or her own car insurance.

What do they plan to use the car for? If it’s any kind of commercial activity, like driving for a ridesharing program, you’ll need to check your auto insurance policy. Again, in many states, the car owner’s auto insurance provides primary coverage. If the car is being driven for commercial purposes and you only have a personal policy, you may not have sufficient coverage.

Additionally:

Will the borrower use the car regularly? Your newly licensed teenager may phrase it as ‘borrowing’ the car, but if they’re using it to go to sports practice or the mall every weekend (and live in your household), you should add them to your insurance policy as a regular user.

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    By the way, the phrase you're looking for is "occasional driver". – chrylis -on strike- Sep 28 '16 at 19:05
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    I had an insurance agent call it "promiscuous use". Got a chuckle because of the most familiar connotation of that adjective. – TecBrat Sep 28 '16 at 19:15
  • Liability coverage rules vary from state to state. But my impression, based on consulting with my insurance company before renting a car, is that insurance is taken out on the driver, not the car. The driver in an accident is the one who is liable. The driver's insurance would need to cover any claims. – Xalorous Sep 29 '16 at 17:54
  • @Xalorous renting a car is an entirely different use case with different applicable laws. – Digital Chris Sep 30 '16 at 14:08
  • @DigitalChris I asked these types of questions when I called about renting a car and whether I would be covered. My insurance company explained that my liability coverage covered me in any car. Comprehensive covered my car. – Xalorous Sep 30 '16 at 14:14
6

Check your policy. Most policies in US do not require you to declare/inform the insurance company about one of drivers, assuming that they have valid licence. Your policy would cover any damage.

Note claim if any would get recorded against you and may result in increased premium in next year.

4

Answering from Germany but my advice should be applicable worldwide:

I had that issue two times. Each time I just gave my insurance a short call to their service line. I described my plans:

First time, I was too ill to safely drive myself. Problem was I've been to another city. So I asked a friend and his partner (she's also a friend of mine but not as close), if they could fetch me and my car. I called my car insurance. They told me it wasn't covered as a regular occurrence in my policy but they would allow it as an exception, because it was safer (also for them) to do so.

In between I upgraded my policy to include arbitrary drivers but forgot that I had done so.

Second time, I intended to lend my car to my sister-in-law while I was on vacation. They checked my policy and said it's OK and I wouldn't have needed to call to tell them, because I had upgraded my policy.

Calls were less than 10-15 minutes including waiting in the line. Apparently insurance hotlines are not as crowded as phone company hotlines. However that's probably because people are hesitant to call the former for some reason.

The elegance of this answer lies in that your insurance company will know your policy, country specifics and can still make exceptions. Whether you trust a company to uphold exceptions agreed upon at their hotline is another question. I recommend writing down the name of the service employee as well as time and duration of the call.

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    Why oh why should it apply worldwide? In Germany you insure the car for example, in other countries the person driving it. There is a huge difference. – webjunkie Sep 29 '16 at 10:10
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    It applies worldwide, because the advice is: Call your insurance company. That works worldwide regardless of what is insured. It does not apply in countries, where phones are unavailable. However those countries tend to have few cars lest insurances... I highlighted the according sentence to make it more clear. – NoAnswer Sep 29 '16 at 10:49
1

Two options:

  1. Lend your friend the car after making sure they've got current license and insurance and consulting your insurance company.
  2. Help them get a rental car.

# 1 only if you're willing to be financially responsible for anything that happens. Keep in mind that it's not inconceivable that your insurance company says that your coverage applies, but they refuse to pay a claim. Then you could be left holding the bag, or in a legal battle with a (former) friend.

# 2 will save your friendship if there is an incident.

0

In New Jersey, at least, you pay to insure the car. If someone steals your car, and crashes into a building, you are covered even though YOU aren't driving the car. So no matter who is driving it, the car is covered. Your insurance company might not renew your policy if they find out, for example, that you insured your car with yourself stipulated as the only driver, and your race car driver nephew is actually the regular driver of it. I am not an insurance agent or broker, but I received this information from someone who is.

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    Careful: Where I live, the insurance will indeed pay out third party damage (you must have third party liability insurance) and damage to your car if it is covered by the insurance, but if the driver didn't have the right to drive or wasn't covered by insurance they will ask the driver to repay the money, and they will ask you to repay if there was a situation where you shouldn't have lent the car (like driver without driving license, or drunk driver). – gnasher729 Sep 29 '16 at 13:51
  • Liability insurance is on the driver, comprehensive insurance is on the car. – Xalorous Sep 29 '16 at 17:56
  • In many places it's more complicated. For third party liability, the insurance company will most of the time have to pay the third party damage, but then recover money from the true driver if they are not insured. – gnasher729 Sep 30 '16 at 12:00
0

I read the question "If I let..." as meaning the past. If let your friend drive your car yesterday, without causing any damage, then it is unlikely to benefit you in any way if you tell the insurance about it.

If you want to let your friend drive your car tomorrow, ask your insurance.

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    let is not necessarily past tense, and I would not interpret it that way in the context of the question. – Joe Sep 29 '16 at 14:07
-3

Your friend will probably not be covered by your insurance, and depending on the jurisdiction they may be committing a criminal offence for driving while uninsured, and you may also be committing a criminal offence for letting them do so. Impractical or not, you have to get the insurance company's consent for every driver, even if they will only drive the car once for a hundred yards.

But if your friend has their own car insurance back home, it may cover them for occasional use of other vehicles, and they should check that.

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    But does their insurance cover them to drive other vehicles? – Mike Scott Sep 28 '16 at 14:58
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    I don't think this is necessarily true. I would have to double check my policy to be certain, but I am pretty sure it says that other people driving my car with my permission are automatically covered, provided they have a valid license, etc, and that the use is only occasional, and with a few other exceptions. I don't think this is unusual for car insurance policies in the US. – Nate Eldredge Sep 28 '16 at 14:59
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    Care to cite at least one US jurisdiction where letting a friend (with a current driver's license, and not drunk) drive your car is a criminal offence? – user662852 Sep 28 '16 at 18:26
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    @user662852 The question did not specify US at the time I answered it. Lots of countries have states, and the questioner could have been in Australia or Mexico or one of many others. – Mike Scott Sep 28 '16 at 18:33
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    If a question isn't sufficiently specific, ask for and wait for clarification. FGITW isn't a good reason to post an answer that's not necessarily relevant. – Joe Sep 29 '16 at 14:09

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