Suppose you lent a friend your car to drive down to the grocery store. But sometime later, you get a call that your friend has unfortunately had an accident in with your car. Now the question is whose insurance pays for the damages? Do you pay or does your friend pay for the damages? Three factors typically determine this.
- The amount of coverage provided by your policy.
- The coverage on your friend’s policy.
- Who was responsible for the crash?
Auto insurance comes with the car, not the driver
Despite popular perception, auto insurance does not follow the driver. It follows the car. It means, if your friend has crashed your car, your insurance company has to pay for the damages.
This follows the principle of ‘permissive use’ (since you ‘agreed’ to let your friend drive the cars). In such cases, the accident will go on your insurance record and the insurance company will summarily hike your rate.
It may also happen that your friend’s insurance company may agree to pay for some of the damages. This is called ‘pro rata’. Where you are paying for the damages, if the damage or the injuries to the other party exceeds the cover on your car, your friend’s insurance policy will kick in for the additional liability.
When don’t you have to pay for damages?
There are also cases where you don’t have to pay for the damage. These are called excluded cases (or non-permissive use). This has to be proved, otherwise your burden will return to you. Some of these scenarios are.
- Theft – A thief has stolen your car and caused an accident with it. You are not liable to pay for damages to the other car or person. However, you have to take care of the damages to your car (your collision insurance will kick in).
- Use of car without permission – In case your friend used your car without your permission, their coverage will pay for the damage and yours will kick in only if the damages go over the limit allowed on your friend’s insurance policy.
- Use of car by uninsured friend – If your friend takes your car without your permission and crashes it but does not have car insurance, then you have to pay for the damages.
If the accident was not your friend’s fault (in case of an auto accident), the other driver’s insurance will pay for the damages and neither you nor your friend will be affected.
Auto insurance is a complex thing. For more information, or answers to your questions, you can call our experienced team of Florida auto insurance agents and we will be happy to help.
