What if an uninsured friend wrecks my car? (3 Types of Borrowers)

Review your car insurance policy before letting someone uninsured drive your car. Your car insurance company may deny your claim if the uninsured driver isn't listed on your policy.

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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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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 18, 2020

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Here's what you need to know...

  • Most policies have exclusions to coverage and those typically pertain to drivers under a certain age, such as 25
  • Your rates will still go up if someone else wrecks your car, but at least you will have financial protection if that person is on your policy
  • Either way, if your car is involved, your insurance is involved

If you let someone borrow your car, they get into a car accident, and they do not have any auto insurance then what happens?

Typically, car insurance covers the car and not the driver. When you let your friend borrow your car, they are covered by the “permissive use” clause included in most policies.

If that person borrowing your car lives in your household or drives your car often, they should be listed on your policy as a driver.

Since it is not possible to list every person that may drive your car occasionally, you should review the exceptions on your insurance declaration to be sure you are not violating your policy.

No matter who is driving your car at the time of an accident, if you grant permission and that person is at fault then your car insurance and, ultimately, you will be held liable.

Read through the three types of drivers listed below and then make sure to enter your ZIP code to start comparing quotes for auto insurance today!

#1 – Listed and Permissive Drivers

When you purchase your car insurance policy, you be sure to list all of the following drivers:

  • Everyone in your household
  • Anyone you expect to use your vehicle regularly

You must list those in your household as drivers on your policy if they’re going to be using the car. If a dependent is not yet driving at the time when you are buying the policy, it is imperative that you add him or her to your policy immediately when he begins driving.

If you fail to put your teenager on your policy and he gets into an accident while driving your car, your insurance company will not cover any of the damages because he lives in your home and should have been listed as a driver.

Some policies have restrictions for who is considered a “permissive user,” so make sure you review those to be sure your friend will be covered should they cause an accident.

You do not have to add specific drivers to your policy just to let them drive it on occasion. However, it is a good idea to make sure that they meet the requirements listed in your policy.

If you are unsure, call your agent and confirm it. This way, even if there is an accident, you can rest assured that your insurance policy will cover it.

Your rates will go up, but at least you will have financial protection.

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#2 – Illegal Drivers

If someone takes your car without your permission or your car gets stolen, file a police report immediately and then promptly notify your insurance company.

If there is no legal record of your car being stolen and your car becomes involved in an accident during that time frame, you could still be held responsible for damages even though the person driving your car did not have your permission to drive it.

#3 – Uninsured Drivers

In most states, you are not allowed to register a car to drive unless you can prove you have valid insurance for it.

However, you do not need to purchase car insurance in order to be licensed to drive. If you do not have a car, you probably don’t have car insurance.

Not having a car and car insurance means that you can be a legally licensed driver but not be insured.

If you drive someone else’s car, you will most likely be covered under that person’s car insurance.

As the driver of someone else’s car, you should confirm the car is insured before you drive it since you could also be held responsible as the driver, especially if the car is not insured for the minimum requirements.

If you’re the car owner and are considering letting an uninsured driver borrow your vehicle, just keep in mind that if they get in an accident, your insurance will be primary, and will be the only option.

If your uninsured friend actually had insurance, in circumstances where the cost of the accident exceeded your policy limits, their insurance coverage would act as a secondary protection.

Keep in mind, Uninsured/Underinsured Motorist Coverage does not apply to an uninsured driver driving an insured car. It covers your loss when an uninsured vehicle’s driver causes an accident with your vehicle.

This type of insurance only protects the insured victim of the accident, so if you are the uninsured or underinsured motorist and you are at fault for the accident, you will not receive any insurance benefits.

The Scene of the Accident

The scene of the accident is a crucial factor in determining who is at fault for an accident. If the accident warrants an exchange of insurance information and calling the police, then it is important to find out who was at fault.

Make sure that anyone driving your vehicles knows what to do after an accident:

  • Call the police
  • Exchange insurance information
  • Exchange vehicle information
  • If safely possible, take pictures of the scene
  • Document damage
  • Request witness information
  • Write down police officer’s name and whether a report was filed

If your car is involved in an accident you need to notify your insurance company, regardless if the person driving your car has his own insurance or not.

Your car’s involvement means that your insurance is also involved.

If the driver is not exempt from your policy, then your car insurance should provide benefits for all damages as based on the limitations of your coverage.

One of the benefits of car insurance is a financial peace of mind. This peace of mind extends out to many different situations, including times when you need to let other people drive your car.

Unfortunately, as is typical with most insurance policies, if you end up using your benefits you may be greeted with an increase in premiums.

If your premiums have gone up or you would like to find cheaper insurance, you can compare FREE quotes now. Enter your ZIP code to get started!

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