There are some misconceptions about how car insurance comes into play when someone who has borrowed a car gets into an accident. Some believe that if they are paying for the insurance the insurance will follow them, regardless of what car they are using. This, however, is not the case.
When you sign up for insurance, you provide the insurance company with details about your past driving experience as well as all the details about the car you will be driving while insured. This means that the insurance will follow the car and not you, so your insurance will not cover someone else’s vehicle if you happen to get into a crash while borrowing it.
Let’s go through everything you need to know about letting someone borrow your car and how this affects your auto insurance rates.
Types of Drivers Covered By Insurance
Before diving into the details of allowing someone to borrow your car, you should first know who is covered by your insurance.
Primary Driver – The primary driver is the main driver under the insurance. This will be the person who will be using the car on a day to day basis. The primary driver is the one who deals directly with the insurance company and will face higher consequences in the event of an accident. The screening of this driver is how insurance companies determine the cost of the insurance.
Secondary Driver – A secondary driver is someone who uses the vehicle regularly, but not as often as the primary driver. If you want a secondary driver, you must add them to the insurance policy for the vehicle. They will have the same coverage as the primary driver but this will increase your premium due to the increased risk. However, If they have a poor driving history, it could increase your premium even further or the insurer may require you and the person with the poor driving record to sign an Excluded Driver form (restricting the other driver from using the vehicle insured).
If a secondary driver gets into an accident, your insurance will work the same as if you were in a crash, with your premiums possibly increasing.
Occasional Driver – An occasional driver is either a family member or a friend that occasionally drives the primary driver’s car. For example, this driver may take this car out for a spin every week or so and not on a full-time basis.
Anyone who happens to live with the primary driver can be the occasional driver. If you claim them on your insurance as an occasional driver it will not cost you any extra on your insurance unless they have a poor driving history, which could increase your rate.
If an occasional driver gets into an accident, your insurance will work the same as if you were involved, with your premiums possibly increasing.
Incidental Driver – An incidental driver is someone who borrows your car. Some examples in which someone would be considered an incidental driver would be a neighbour borrowing the car to do groceries or a guest from out of town borrowing the car to sightsee.
What to do Before Allowing Someone to Borrow Your Car
There are a few things you should be sure of before you allow someone to borrow your car.
The following are 3 key points you want to consider before allowing someone to borrow your vehicle:
- Assign an Occasional Driver – If someone is consistently borrowing your car, you should add them as an occasional driver under your insurance policy. If someone isn’t listed on your policy, your insurer may deny claims for accident benefits.
- Ensure They Have a Valid Licence – If you allow someone who doesn’t have a valid driver’s licence borrow your car, your insurer may not respond to the claim you make if they get into an accident. This could lead the owner of the vehicle having to pay for both damages and injuries. Possibly even subject to a personal lawsuit.
- Registration and Insurance Details – Make sure you show them where to find your registration and insurance details in the event of an accident or any other trouble arises.
When an Incidental Driver Gets Into An Accident
If someone who is borrowing your car gets into an accident, it can cause your insurance premiums to rise and you may be penalized as an unsafe driver, even if you weren’t actually the one operating the vehicle at the time of the incident.
In Ontario, when you allow someone to borrow your car, they are also borrowing your insurance.
If someone who is borrowing your car gets into an accident, your insurance policy should cover the costs, however not guaranteed, if the driver complies by doing the following:
- Provides a Canadian driver’s license
- Has been given permission to drive the automobile
- If they are following the rules entailed in the insurance policy
- Were not involved in any illegal activity
- If they were not convicted of a criminal code offence under the Highway Traffic Act
When you get car insurance, the insurance follows your car, not you. This means if someone else is driving your vehicle, it is covered under your insurance. This seems like a positive occurrence that can be a benefit to a family member or friend but it can also be a negative. If someone gets into an accident while driving your vehicle, your insurance may go up just the same as if you were the one behind the wheel. Although the damage that is done during the crash would be covered by your insurance, your premiums will more than likely increase in the process. If you have specific questions or are unsure about how your coverage works, call Riders Plus Insurance, and one of our automotive insurance specialists will be glad to give the right advice for your situation.
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