What you need to know before lending your car
“Can I borrow your car?” That common question seems innocent enough. But handing over the keys could impact your insurance if your friend happens to get into an accident.
Lending your insurance
Drivers are insured when using your car, so long as they have your permission to borrow the car. In the unfortunate event an accident happens, it’s important to understand that a claim will be made on the owner’s insurance, even if the driver borrowing your car has their own insurance.
What do I need to know before lending my car?
- Typically your policy will pay out any damages and liability claims.
- The car owner will be responsible for paying the deductible.
- An accident claim will remain on your profile.
- The claim stays on your policy until the person who borrowed your car notifies their own insurance company of the accident.
- The car owner may have increased insurance rates as a result of an accident claim.
What can I do?
- Before lending your car, make sure you trust the driver.
- Ensure the driver understands that borrowing your car is a big responsibility.
- Make sure they have a valid driver’s license.
- Keep a copy of the vehicle’s registration and liability slip in the car.
- Make sure your car is in good working order.
- If this person borrows your car on a regular basis, update your policy to include them as an occasional driver.
Before you let someone else get behind the wheel of your vehicle, understand that you are lending more than just your car – you are also lending your insurance.
According to the Insurance Bureau of Canada (IBC), if you are lending a car:
- You must consent to its use by the other driver.
- The person borrowing your car cannot be using it as part of a regular routine. If so, you must have the person listed as an occasional driver on your insurance policy.
- The person borrowing your car must be a licensed driver.
Remember: If the person borrowing your car has a collision while driving your car, it goes on your insurance record. When you lend your car, you are also lending your driving record.