Romanov Report 21 - Oct 6, 2005
Lending Your Car
If you lend your car, you lend your insurance. Another driver can seriously affect your insurance rates. Their tickets are their problem, but their accidents are your problem.
Who can drive your car? You can lend your car to anyone who has a valid driver's licence, as long as they are not an excluded driver on your policy.
What's the risk if their driver's licence isn't valid? Very risky. Many people are driving around unaware that their licence has been suspended. YOU might be one of them.
Here's only 3 examples which could cause a driver's licence suspension:
1) A missed renewal payment for your driver's licence.
2) An unpaid traffic ticket, that missed the due date.
3) Missed child support payments. Your driver's licence can be suspended without written notice.
If you lend your car to someone whose licence is suspended, and they have an accident, your insurance company is NOT liable to pay for the damages caused by an unlicensed driver.
To find out if the person has a valid driver's licence you can call 1-900-565-6555. The fee of $2.50 is charged to your telephone bill. For more information you can click on the link below:
Can I lend my car to a driver in my household? If the driver is in your household and is listed as a driver on your policy or any other policy, this is acceptable. However, if they are not listed, insurance companies will add them as a driver if they have an accident. All licensed drivers in the household must be listed on your policy, (or shown to be listed on another policy) or be specifically excluded.
What happens if they cause an accident? If you lend your car and that driver causes an accident, that accident is charged to your policy. It's as though you were driving the vehicle yourself. An at-fault accident, whether the car repair work is minor, like a paint touch-up or fender bender to a complete body repair or re-alignment, your insurance rate will increase, regardless of the cost of vehicle repair.
If the driver being added is a "young driver" your rate will go up. If the driver has multiple tickets or accidents your rate will go up. Your rate will not be affected if the driver is over 25 years old and has a clean record.
Will my insurance company try to recover the damage from the driver? The insurance company will not recover any claim payments from the driver, as long as the driver had a valid driver licence and your permission to drive. This means that it will only affect your insurance rate.
What if the driver gets a ticket? Any tickets are the driver's responsibility and do not affect your insurance.
What if the driver is impaired? If the driver is impaired and you knowingly let him drive your car, the insurance will not pay for damages and only limited coverage is available for injuries.
If the driver has your permission to drive and later becomes impaired and drives impaired without your knowledge, the insurance company will pay for any damages caused, but will sue the driver for their claims costs.
What if my vehicle is leased? Check your lease to be sure that drivers under a certain age are not excluded.