Lending Your Car Comes With Risks

You lent your car to a neighbor to run errands. The neighbor calls you two hours later and says they were in an accident, the car is totaled and there are injuries. You heart skips a beat. You stumble for words. You ask if your neighbor is okay. Your neighbor gives you few details then hangs up. Then you wait. Hours go by and no word. Then you get a call, it’s from the police and they want to question you.

Not understanding the severity of the accident or what’s happened to your neighbor you comply with the police and answer their questions.

This is a scenario that plays out across Indiana on an almost hourly basis. Friends lend each other their cars to go to work, get groceries, pick up kids after school and make quick trips to where ever they need to go. But who is at fault if your neighbor was involved in an accident using your car? The answer may surprise you.

Well the way automobile insurance in most states works is that the insurance follows the car, not the driver. Which means that regardless of who is driving the vehicle with comprehensive and collision coverage your car is protected.

Here’s how most auto insurances work …

If you give someone permission to use your car, your car insurance becomes primary coverage which means that your car insurance would be primarily liable if something happens. And the person you lent your vehicle to, their insurance would act as secondary coverage. The caveat here is that if your friend gets in an accident you would be on the hook for the deductible and quite possibly get hit with a rate increase after the accident. If your friend has auto insurance, they could possibly be responsible for any personal liability and medical injuries associated with the claim. Ideally, their coverage might step in if the limits of your policy have been reached.

Now say your neighbor who borrowed your car wasn’t at fault for the accident then in most cases you shouldn’t have to worry about paying a deductible or your insurance rates going up. You file the claim with the at-fault party’s insurance and you get the damages to your vehicle covered.

But what happens when your neighbor who you lent your car to doesn’t have their own insurance (otherwise known as an uninsured driver) and causes the accident? The answer is you could be liable for all the damages. For example: you neighbor causes an accident with your vehicle, injures other people and the liabilities exceed your insurance limits. Now the injured parties are suing you for their medical fees and property damages.

So why do we share this information?

We share it to give you an insight and an understanding that although lending your car to your neighbor may seem like a friendly gesture there’s always a chance that it won’t end well and you could be sued for injuries you didn’t even cause. Insurance companies will use the reports generated in police investigations as evidence against you in a lawsuit. Regardless if the information the police collect is correct or not. Moreover, and it is important, policy language may very well completely alter the general information noted herein. So every situation is unique and must be independently evaluated.

If you or a loved one has been injured in a car accident and you would like to know if your case has merit, call the Law Office of David W. Holub at (219)736-9700 today.

We are committed to providing high quality legal service which includes an uncompromising pursuit of our client’s legal interests, while being accessible and attentive to our clients during times of personal challenge. We understand that auto accidents also bring emotional stress over how to pay medical bills and replace damaged property. We are devoted to serving our clients by assisting them in dealing with their auto insurance company, their health insurance carrier, and the other driver’s insurance company.

As soon as we are retained, our legal team begins working to establish liability on the part of the driver responsible for the crash. This includes interviewing witnesses, analyzing the crash scene, and on occasion hiring experts to prove the accident was caused by the negligence, recklessness, or carelessness of the other driver.

Again that number to call is (219)736-9700, we look forward to hearing from you.


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