It’s a question you’ve all had on your mind, and you’ve likely heard a number of conflicting answers. Yes, it’s perfectly fine to let your friend or coworker drive your car. No, you should never let someone who isn’t listed on your policy drive.
Many reasons can arise requiring someone else to drive your vehicle, but you need to know the risks involved and how your New Mexico insurance agency will handle it in the event of an accident. There are a plethora of scenarios and knowing the fate of each one will allow you to remain in control of the situation. Let’s break them down.
Whose Policy Covers the Vehicle?
Is the car covered by the driver’s car insurance policy or by the vehicle owner’s insurance policy? In an at-fault driver situation, the only way to get coverage on the vehicle is by the owner of the vehicle’s insurance policy. If the policy does not have collision coverage listed, no coverage is available. The vehicle’s deductible applies. The vehicle owner and the at-fault driver must decide who will pay the deductible, but the owner of the vehicle will ultimately be held responsible. The deductible will have to be paid in order to get the vehicle repaired.
The owner of the vehicle’s insurance policy will provide liability coverage, too. Depending on the degree of the accident, the vehicle’s liability may not be enough to cover the damages, which then the driver’s policy can pick up additional liability if the limits are higher than what was on the vehicle driven in the accident.
Will My Car Insurance Rates Go Up?
By allowing another driver to operate your vehicle, you are taking responsibility for the driver. Typically, there will be a surcharge to the vehicle owner’s policy with an at-fault accident. Rates will be based on the likelihood of a future claim. Even though your vehicle was loaned out at the time of the at-fault accident, you are a higher risk for having done so, therefore a higher price will be reflected in your insurance premium.
Will a Ticket Affect My Policy?
Any driving violations received by the other driver will not affect the owner of the vehicle’s insurance policy or rates. Traffic violations reflect directly on the driver’s license and record of the driver. Consequently, the at-fault driver’s car insurance rate could raise, but not affect you. Your auto insurance agent can run through all the ins and outs with you.
Consider the risk the next time you think about loaning your car out. Ultimately, you’ll be on the hook for the costs of the damage caused by another driver. Keep the number of a few rental car places you’d be happy to recommend handy just in case.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that people like you face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.