My Friend Crashed My Car – Am I Liable?

People commonly loan out their cars to friends and family. But what happens when you loan out your car to someone and they get into an accident? Worse yet, what if the accident is the fault of your friend or loved one whom you let borrow your car? Are you liable?

The good news is this – car insurance policies cover the car and not the driver. So if you loan out your car to your neighbor and they cause an accident, you will be responsible for filing the claim with your insurance company.

Exceptions to the Rule

However, there are important exceptions to keep in mind.

First, most insurance polices do not cover people you live with unless those people are added to your insurance. It seems odd that the people most likely to drive your car are not covered under the policy by default, but perhaps the insurance companies are trying avoid insuring someone who they normally would not cover.

As such, check your policy carefully before loaning your car to someone you live with to understand whether or not they are covered.

Another important exception applies if you are using your vehicle for work-related purposes. For example, assume you own a small flower shop and use your personal car to make deliveries.

Now assume further that you ask one of your employees to make a delivery in your personal car and they cause an accident in the course of that delivery. Generally, your personal policy excludes coverage if the vehicle was being used for business purposes, especially if the car was being used for delivery purposes.

Will Your Insurance Cover Everything?

In most states, you are required to have liability insurance for both property damage and personal injury. If you loan out your car to a friend they cause an accident, your liability insurance will cover the damages to the other party.

However, if their damages are greater than your policy limit, then your friend’s insurance policy will cover the difference. But be careful, because if they person driving your car doesn’t have their own car insurance, then you will be responsible for anything beyond your policy limit.

What To Do After An Accident

If you loaned out your car to a friend or loved one and they caused an accident, you should consider speaking to an attorney in your local jurisdiction to better understand your rights. Given the potential pitfalls involved with loaning out your car, you may want consider simply giving your friend a ride or having them use public transportation.

Top 7 Steps To Take After a Car Accident

If you’ve ever been in a car accident, you know how traumatic those moments immediately following the accident can be. You’re out of sorts, stressed, and may be injured. To help out, we outline the top 7 steps to take after a car accident. Our list is designed to help you protect both your legal rights and physical well-being.

Step 1: Seek medical assistance

The first step is obvious. If you have been injured, you should immediately seek medical treatment for your injuries. This is critical for several reasons. First, even car accident injuries that seem minor could have long-lasting consequences. Prompt attention could help speed up the recovery process and prevent minor injuries from becoming more serious. Second, it’s important to establish record of injury if you decide to pursue your case against the negligent party.

Step 2: Exchange Information

After an accident, make sure you exchange information with the other drivers involved in the accident. At a minimum, take a picture of their drivers license, insurance documents, and license plate. Additionally, you should get their phone number.

Step 3: Get Names of Witnesses

If you can, try to get the names and contact info of anyone that may have witnessed the accident. This information could be useful if litigation becomes necessary.

Step 4: Do Not Admit Fault

After an accident, you may be inclined to apologize and claim responsibility for the accident. Given the confusion, you may not understand what actually happened. As such, it’s best to not admit fault and instead speak to an attorney regrading the accident.

Step 5: Sign Any Tickets Issued By Police

You may be issued a ticket by police at the scene of the accident and may be asked to sign it. Signing the ticket is not an admission of guilt or fault, just simply acknowledgement that you received the ticket. As such, you should cooperate with law enforcement.

Step 6: Do Not Negotiate with the Insurance Company

You may be contacted by the negligent party’s insurance company. They have attorneys and professional insurance adjusters who do everything they can to minimize your claims and attempt to have you make statements against your interests. While you are within your rights to negotiate with an insurance company, you should consider speaking to an attorney who can deal with them on your behalf.

Step 7: Speak to a Personal Injury Attorney

As mentioned, the insurance company will have a team of attorneys. By finding a good lawyer you level the playing field. Further, an attorney can help you properly assess your injuries to ensure that you get the amount of compensation you deserve.