When you lend your vehicle to someone else, you have very little control over what he or she does behind the wheel. The person that borrowed your car may end up getting into an accident that may or may not have been their fault. Even if you were not driving, you could still be partially liable for the accident simply because it involved your car.
To combat this liability, your insurance coverage will usually step in to cover you, even when someone else is driving. However, you must meet certain conditions for this coverage to apply.
Lending Your Car and Insurance: Things to Consider
Everyone in British Columbia is required to have auto insurance. The basic auto plan includes medical expenses and rehabilitation expenses of up to $200,000. You can purchase optional coverages that extend above these basic amounts as well. When you lend your car to someone else, you are also, in essence, sharing your insurance policy for the vehicle as well.
As a rule, as long as you actually gave the guest driver permission to use your car, your insurance will cover the driver. That also means that if your friend or relative is involved in an accident that is his or her fault, your insurance premium may go up as well.
Keep in mind that the car must be used in a way that the vehicle is insured for coverage to apply. For example, if your vehicle is in a rate class specific for business purposes only, insurance coverage may not apply to your friend who is using the vehicle for his her own personal use, even if you gave them permission to use it for that purpose. Having insurance coverage is vital every time your car moves, so be sure to only lend out your vehicle for the same purposes for which you use it.
Requirement to Name a Guest Driver
The guest driver will only be covered under your plan if certain conditions are met. Otherwise, you could still be on the hook for legal liability without having insurance coverage. These requirements include the following:
- The owner of the vehicle must agree that the guest driver can use the car. This prevents situations where someone has stolen your car or is otherwise using it without permission. Generally, you also will not be legally liable for an accident when someone has taken your vehicle and caused an accident.
- You cannot lend your vehicle to another person regularly without naming that person on the insurance policy. For example, if you allow your neighbour to use your car every weekend so he can get to work, your friend should be named on the policy. You can update your coverage to include your neighbour as an occasional driver.
- The driver who uses your vehicle must also be licensed and legally permitted to drive in British Columbia (or another province or territory). You cannot lend your car to someone who does not have a license and expect coverage.
It is important to keep in mind that when you lend your vehicle to someone else, you are also letting him or her “borrow” your insurance coverage. Generally, any requirement or restriction that applies to you will also apply to the guest driver as well.
Getting Legal Help
Liability for an accident can be complicated. If your insurance carrier is telling you that you do not have coverage or you are not sure who may be liable, it is a good idea to speak with an experienced lawyer about your legal options. The team at Diamond and Diamond can help you understand and assert your rights after a car accident in British Columbia.