If you own a vehicle, chances are you have loaned your car to someone else for one reason or another. Maybe your friend had to make an emergency trip to the doctor and didn’t have a ride or perhaps a coworker asked permission to use your car to grab lunch one afternoon. Without giving it much consideration, you most likely handed over the keys, but is loaning your car risk free?
Imagine if the day your coworker asked to use your car to get lunch he causes an accident that leaves the other car totaled and the other driver with horrific injuries. Because he caused the accident you may be inclined to think his insurance is responsible; however, in most situations auto insurance coverage follows the car and NOT the at fault driver. And this is where the issues may arise. Knowing this would you have so readily loaned your car to the coworker?
Letting someone operate your vehicle doesn’t come without responsibility and risk. When you get into your vehicle you are in control of how you carefully and responsibly your drive; however, once you let someone else drive your car, you are no longer in control of how safe someone else is driving OR whether that person will, in turn, let another person drive your car.
Loaning Your Car and Permissive Use
If someone has permissive use to drive your car (either implied or expressed) he/she is considered to be a covered driver under your Alabama auto insurance policy; however, someone who does NOT have permission to drive the car would NOT be considered a covered driver under your auto insurance policy and thus, coverage would be denied. Permissive use is not always easy to pinpoint and may be up for a thorough investigation if that situation presents itself.
It is recommended that you clearly express to your local Alabama independent insurance agent who resides in your home, who operates your vehicle(s) and who regularly drives your car(s). That way, your insurance agent can have the correct information should an auto accident take place.
Loaning your car can lead to the following situations that you need to be financially prepared to handle if an accident occurs:
- An Increase in Auto Insurance Premiums- If you have a clear driving record and someone driving your car causes an accident, you will no longer be eligible for a claims-free discount.
- Potential Lawsuits
- Loss of Assets- Assume someone causes a catastrophic auto accident while driving your car and your auto limits of liability are exhausted. Your assets may be targeted in order to pay the remaining balance of the claim settlement.
Make sure you are adequately informed about the many potential risks that surround loaning your car. Burkett & Associates Insurance Agency is here to answer any questions you may have regarding permissive use or coverage issues when loaning your car. Contact us TODAY at 256-704-7400 for all of your Alabama auto insurance needs.