What Happens if Someone Who Isn’t on Your Insurance Crashes Your Car

January 9, 2024

Americans can’t imagine their lives without three things: gadgets, news, and cars. The latest statistical data claims that from 2017 to 2021, the number of registrations for personal and commercial vehicles in the United States increased by 3.66%.

However, with the growing number of cars on the roads, the number of accidents is also increasing. According to USA TODAY, in 2021, there were 6,102,936 road traffic incidents in the USA, with 39,508 of them resulting in fatalities.

It’s better not to neglect purchasing auto insurance, as it helps avoid numerous problems in case of accidents.

In the USA, there are countless types of auto insurance designed to meet the various needs of each driver. Some are mandatory, while others are optional, depending on the driver’s experience and personal circumstances.

In this article, we won’t examine a specific policy but rather explore what happens if someone else is driving my car and gets in an accident. This is a relevant question for car owners who often let friends, relatives, and eligible children use their vehicles.

This article will explore the responsibilities and consequences of someone else driving your car and being involved in an accident.

Accident in Someone Else’s Car: Who Is Responsible?

According to the rules, the responsibility for damage caused to a vehicle in a traffic accident falls on the at-fault party. Therefore, if you allow someone else to drive your car and they get into an accident, the responsibility lies with the driver of a vehicle responsible for causing an accident.

The insurance policy of the at-fault driver must cover the following:

  • Damage to your car
  • Legal expenses

Keep in mind that this incident may lead to an increase in insurance rates for your vehicle. Insurance companies justify this by stating that you are exposed to greater risk since you allow other people to use your car.

If the driver who borrowed your car is at fault, your responsibility will depend on the following factors:

  • The terms of your insurance policy
  • Whether you allowed them to use your car

Many policies compensate for damage resulting from an accident caused by your friend or relative, provided they don’t regularly use your car, as they should be listed on your insurance in such cases.

However, some coverages exclude other drivers – even family members if they are not listed on your policy. Usually, these coverages are inexpensive and provide limited compensation. Therefore, carefully choose your insurer and appropriate coverage to avoid wondering what happens if someone else crashes your car.

Next, let’s explore what happens if someone crashes your car with and without your permission to use it.

Permissive Use: What Happens if Someone Wrecks Your Car and They Aren’t on Your Insurance

If you let someone else use your car, your insurance coverage typically extends to them. This is called “permissive use.”

If another driver is at fault in an accident that harms someone else, your policy will be primary. It will cover damages until the limit is exhausted. After that, the borrower’s insurance as secondary coverage will pay for the remaining damages within the specified limit.

Here’s a practical example: Emma allowed Matt to borrow her car. Matt gets into an accident, causing harm to Susan. She receives $300,000 for medical bills and legal expenses. Emma’s insurance limit is $250,000. Matt’s insurance policy kicks in to compensate for the damage amount and covers the remaining $50,000 if his limit allows.

Consider an important point: if you negligently entrusted your car to someone, you may be held accountable.

Non-Permissive Use: What Happens if Someone Who Isn’t on Your Insurance Crashes Your Car

If a driver operates your car without your approval, it is considered unauthorized use. This can happen for two reasons:

  1. Someone, often a friend or family member, borrows your car without asking.
  2. Someone steals your car.

In either case, the person behind the wheel — not the car owner — is responsible for any accident that occurs due to their fault. Your insurance coverage will not extend to the unauthorized use of the vehicle, and the at-fault driver’s insurance will cover the damages.

Naturally, thieves do not care about having insurance. As a result, those affected by the accident may rely on their uninsured motorist coverage. Otherwise, they might not receive any compensation at all.

However, there are exceptions in some states. If you did not take reasonable measures to prevent the thief from stealing your car, you may still be held responsible for the accident. California is one such state where you could be held accountable if you left the keys in the ignition before the vehicle was stolen.

It is also important to note the distinction between a thief and a friend, relative, or someone who “borrowed” the car. Clearly, a thief did not have your permission to use the vehicle. However, insurers, courts, and plaintiffs are often skeptical when it comes to the assertion that you did not give permission to your friend or relative. They frequently assume that you did give permission, and proving otherwise is time-consuming and challenging.

Possible Consequences if Someone Drives Your Car and Crashes

If your insurance company or the insurance company of another driver refuses to cover the damages, this can lead to some unpleasant consequences, namely:

  • You may bear financial responsibility, in full or in part, for property damage, legal expenses, or any other related expenses.
  • Depending on the circumstances and your insurance company’s terms, filing a claim for an accident caused by someone not covered by your insurance may lead to an increase in your insurance premiums.
  • Your insurance company may cancel your policy (again, depending on specific conditions).

Additionally, legal proceedings may be initiated against you as the vehicle owner, as well as against the driver.

How To Prevent Situations When Someone Driving My Car Got in an Accident

First and foremost, you should take proactive measures. Don’t wait for an insurance incident to occur to find out what happens if my friend crashes my car. Contact your insurance provider and request detailed information on what your policy covers or doesn’t cover in the event of an accident involving people not listed on your policy.

Accidents happen, and if someone else is behind the wheel of your car, it’s crucial to know how to handle the situation.

To avoid unpleasant consequences, follow these rules:

  • Always exercise caution when allowing others to use your car
  • Familiarize yourself with the terms and conditions of your insurance policy
  • Consider adding additional coverage if necessary

If anything seems unclear or doubtful, seek professional assistance from your insurance company. Your agent will explain what your policy covers and provide comprehensive answers to questions such as “What happens if you injure someone in a car accident?” or “What if someone else crashes my car?” or “If someone crashes your car, who pays?” or “If someone wrecks my car who is liable?” and so on.

Get or Review Your Policy To Manage the Risks

You might be wondering what to do if someone took my car without permission and had an accident. Also, what are the consequences if I let someone borrow my car and they get in an accident? These questions concern every car owner.

Typically, the at-fault party is responsible, and the policy covers the damage to the vehicle, not the driver. However, insurance policies have different limits and conditions. Therefore, settling an insurance dispute depends on the type of your policy and the circumstances under which someone else used your car – with or without your permission.

To avoid such situations, exercise caution when lending your car to others, carefully review the terms of your policy, and adjust the coverage amount according to your needs.

Victoria Berezhetska

Victoria Berezhetska is a Content Lead at Phonexa.com and an expert contributor to CoverExplore. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At CoverExplore, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.

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