Car Insurance Coverage Limits if a Friend Borrows Your Car

Review your policy to see if a friend is covered on your car insurance. If you have a friend driving your car, make sure they are covered by either their own insurance or your car insurance.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jun 10, 2020

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Here's what you need to know...

  • Whether your car insurance covers your friend who is borrowing your car depends on your specific policy
  • If your friend has their own insurance, your insurance or their insurance will cover them, so you’re pretty safe
  • You should ask anyone who will borrow your car about their driving record

If you let a friend borrow your car, you will probably wonder whether or not your insurance will cover them if something were to happen while they were driving. This question does not have a “yes” or “no” answer.

Covering your friend really depends on:

  • your insurance company
  • how often they borrow your car
  • what they are using your car for
  • how far they go with your vehicle

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The following article will provide you with the answers you need to help you decide whether or not you should let your friend borrow your car. You really should weigh the risks before you say “yes” to your buddy!

How often will your friend be driving?

If your friend only takes your car every once in a while, your insurance company will cover the vehicle should something happen while they are driving.

However, your friend must have a valid driver’s license in order for your insurance company to cover them during these sporadic trips.

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How far will they be driving?

How far your friend will be driving is really a consideration, because the farther your friend drives, statistically, the more likely they are to get in an accident.

Who is borrowing your car?

Make sure that you know the individual who is borrowing your car. You might want to ask them about their driving record before you hand over the keys.

After all, there is a reason they need to borrow your car. If it is because they cannot get insurance, they have a suspended license, or they have lost driving privileges due to a DUI, you do not want to loan them your car.

The other factor you should look into is how your insurance company defines an “insured person.” Look it up in your insurance policy as this will mandate whether your friend is covered under your insurance plan.

For example, The Free Dictionary defines an insured person as “a person whose interests are protected by an insurance policy; a person who contracts for an insurance policy that indemnifies him against loss of property or life or health, etc.”

Notice that in the first definition above it does not specify that it is the individual who is in contract with the insurance company as the one individual.

However, in the second definition, the insured is in contract with the insurance company. This is why it is extremely important to view your policy’s definition. Your friend might not be covered under your policy if the definition reads like the second one.

Finally, liability coverage is attached to the individual who is insured.

So, even if your policy does not permit other drivers to use your vehicle, if your friend has liability coverage of their own they are covered at least for liability.

However, you do want to make sure that your friend’s liability coverage is at least the minimum that your state requires.

Comprehensive and collision coverage do not work the same way. This is why you must determine how your policy is worded and who is covered under the policy.

How long will your friend have your car?

Another important factor in determining whether or not your friend will be covered by your insurance policy is how long your friend plans on using your car.

The insurance company will consider your friend a risk if the use of the vehicle is “regular” or “frequent.” Regular or frequent denotes repeated use of the vehicle. If the use is only occasional, the insurance company will most likely cover the car if something adverse should happen.

If your friend is using your car daily or for several days, weeks, or months at a time, you should look into adding the friend to your policy.

Otherwise, there is a good chance your insurance company will waver on coverage should something happen. You can always drop the coverage when your friend is able to get their car back or purchase a vehicle of their own.

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What is the purpose of your friend borrowing your car?

Another consideration is to look at is why your friend is borrowing your car. If it is for business purposes, your personal car insurance will not cover them. Any car used for business should be insured by a business or commercial insurance policy.

Weigh the risks before handing over your keys. You do not want to affect your coverage by loaning out your car.

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