If You Rent a Personal Car to a Friend, Who Pays for Loss if There Is an Accident?

Your insurace company pays for most accidents involving your vehicle.

If you are like most people, it's likely that you let other people rent or borrow your personal vehicle on occasion. Under normal circumstances, this is no problem. However, if your friend gets in an accident while driving your car, you need to know who will foot the bill.

Your Coverage

An insurance company covers a vehicle, its primary driver and members of the same household. If a friend occasionally uses your car, with your permission, any accident that occurs should be covered by your insurance company. Like any accident claim, however, your insurance rates may go up.

Your Friend's Coverage

If your friend has his own insurance coverage, he may have a clause in his policy that provides compensation for an accident that occurs when he is driving a rental car. Depending on the policies of each of your individual companies, his provider might pick up the tab. If he borrows the car, however, this probably will not apply.

Considerations

If your friend is renting your car for long periods of time and has become the primary driver of the vehicle, notify your insurance company of the change. If you do not do so, it may deny coverage to your vehicle if there is an accident, indicating that it received fraudulent and incomplete information.

References

• Car Insurance Rates: Borrowed Cars- Is Your Friend Covered in an Accident? Insurance and Borrowing