A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 18, 2021

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Here's what you need to know...

  • Car insurance follows the vehicle, not the insured.
  • You don’t have to have car insurance to borrow a vehicle, but you should have a policy for extra protection.
  • If you are not sure about your coverage, contact the insurance company to discuss the specific terms.
  • As a lender, you could still be held liable for a friend’s accident in your car, even if you do have insurance.
  • Be careful of who you lend your car to.
  • If someone is going to be driving your vehicle more than occasionally, consider adding them to your policy.

You may not think much of tossing the keys to your friends and letting them borrow your car for a few hours or an afternoon, but what happens if they were to get into a serious accident with your vehicle? Many drivers do this, it’s a great way to be helpful! It is important to know how insurance coverage works in this kind of situation. Compare car insurance rates now by using our FREE tool above!

Do you need to have coverage to lend someone a vehicle?

It is a common misconception that car insurance follows the insured person. In fact, it is quite the opposite. Insurance coverage follows the vehicle. So, if you are letting a friend borrow your car, they technically don’t have to have insurance of their own because, in most cases, they are now covered under your insurance.

Most states will cover your vehicle no matter who’s driving if you have collision and comprehensive coverage in your policy. Sometimes there’s even a permissive driver clause within your policy, which would certainly help. However, you have to be careful with this, because there could be some potential limits, which in turn could cause problems to arise and implicate you.

Say you were to let a friend borrow your car and they had a head-on collision with another vehicle that caused major damage and medical expenses. What would happen? If your friend was at fault, your insurance policy would kick in and cover them to the extent of coverage that was outlined in your policy, which could be insufficient to cover everything. If the borrower has their own car insurance, that insurance acts as a secondary insurance and will kick in after your limits of coverage have been exhausted.

If you’ve reached the point where your insurance has maxed out and the borrower doesn’t have insurance of their own, the injured party could potentially come after you for damage done and medical expenses.

Claims should not be treated lightly; there are quite a few factors that determine who ends up paying for what after an accident. Although borrowers are generally covered under the lender’s insurance, don’t just assume that that’s automatically the way it is. It is always best to contact the insurance company to discuss the terms of your coverage and get a definitive answer on what your auto insurance policy covers, because every company is different.

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Does it matter who borrows your car?

If you do decide to let someone borrow your car, be responsible in your decision to let them operate your vehicle. You need to be able to trust that they will be responsible in driving your car, by not engaging in reckless driving or doing illegal acts with your vehicle. Also, make sure that they have a valid driver’s license. You could be sued if an accident is caused because:

  • You let someone drive drunk in your vehicle.
  • You let someone drive on a suspended license with your vehicle.

Also, be prepared for a major increase in your insurance premium. The insurance company does not tread lightly in these instances, which means an increase in the cost of your auto policy.

What happens if you have frequent drivers of your car?

If you are frequently letting someone borrow your car you could be facing a potential problem. Even if the people driving your car are licensed drivers, you need to understand the coverage limits that your provider has in place. Most insurance carriers have set up a premium based on the primary driver, and they won’t usually account for an additional driver unless you add them on to your policy. If you are letting someone borrow your car once every blue moon, you probably don’t need to add them. However, if someone starts driving your car quite regularly, you will want to look at adding them to your policy. If that’s not a possibility, you may want to gently suggest they find a rental vehicle.

In Maine, for example, if your insurance company finds out there is another person driving your vehicle regularly without being added to the policy, that is grounds for them to deny future claims, based on the fact that you provided them false information at the time of application. Adding another person to your policy will most likely cause your rates to increase, but it is better to be safer in the long run.

Is it a good idea to shop around for better rates?

If your current policy isn’t working out, you can find one that will meet your specific needs, it just means that you’ll have to shop around. When you have a situation like this, where you’re the vehicle owner but you have other frequent drivers of your car, you’re going to want to see what types of coverage you should be interested in. Better to spend time researching policy coverage rather than getting stuck in the middle of a bunch of legal matters. And a great way to do that is through online quotes. Comparing quotes from different companies will help you get the best rates possible.

Always make sure you are dealing with a reputable company and carefully read the terms outlined in your policy before purchasing any insurance.

Lending your personal vehicle to someone should not be taken lightly. Do not let anyone borrow your vehicle if you feel uneasy about them. If you let someone borrow your car, remember the potential consequences that could come back to bite you if they were to get into an accident. Don’t let someone with bad driving records behind the wheel of your car, and make sure that anyone you allow behind the wheel has a license. And if you have someone who shares your vehicle frequently, find out what non-owner policies are out there for you, so that you can be protected no matter what.

Enter your zip code in our FREE tool below to start comparing car insurance rates now!