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When you lend your car to a friend, a number of scenarios could play out. All of them involve your insurance coverage. In Virginia, car insurance generally follows the car, not the driver. That means that your insurance will typically cover damages, no matter who was driving the insured vehicle.
It is important to note that the optional medical payments (MedPay) coverage that Virginia drivers can purchase follows the driver, not the car, so it will not pay out for a friend who gets into an accident in your vehicle. Each state has different laws, so check with your state.
Most standard insurance policies allow permissive use. This means they expect that a car may be driven by someone else with permission periodically, which is less than 12 times per year under most policies. If you routinely allow a relative, friend, or neighbor to use your car regularly, it is probably best to add that person to your policy.
Listed below are several examples of what can happen when you lend your car to someone else in Virginia.
When They Have Permission
You give your friend permission to drive your car while visiting you, and she gets into a car accident. Under Virginia law, a car owner’s insurance will cover accident-related expenses when someone else is behind the wheel. Virginia code stipulates that this person must have expressed or implied consent to drive the vehicle.
If the person you allowed to borrow the car has their own insurance, their policy provides coverage on top of yours. This is especially beneficial when damages exceed your policy’s limit. Their coverage would then take effect. If the person who drove your car is uninsured, they are covered under your policy, but only if you gave them expressed or implied permission to borrow your car.
Accident Beyond the Permitted Area
You allow your roommate to drive your car while his SUV is in the shop. You stipulate that he can drive only in the local area. He decides to go across state lines to a store and gets into a car accident there. In this case, your car insurance may not cover damages because your roommate drove beyond the permitted area that you specified. Their car insurance may not cover the damages, either. For this reason, it is essential to be very clear on driving limitations when you lend your car to a friend.
Car Accident Caused by Another Driver
You allow your cousin to drive your car while you are on vacation, and she gets into an accident caused by another driver. Should this happen in Virginia, the state’s traditional fault-based insurance system would apply, which says whoever is at fault is responsible for covering the losses. Even though your cousin is not on your policy, when the other driver is at fault, their insurance is responsible for covering damages related to the accident.
Some states operate under a no-fault insurance scheme. This means that if you permit someone else to drive your car and they get into an accident, you must file a claim with your insurance first, regardless of who caused the accident. If losses reach your policy limits, you could then make a legal claim against the at-fault driver. Check your policy to understand your state’s requirements.
Friend Who Has No Insurance
You permit your best friend to drive your car. He wrecks it and does not have full insurance. In Virginia, drivers are not required to have full insurance coverage. Your insurance will cover accident damages up to your policy limit, but you may be on the hook for anything above the limits.
If damage to your vehicle is $25,000 but your policy only covers up to $15,000, there is a $10,000 gap. If your friend had car insurance, their policy could cover the gap. However, since he is not fully insured, you will have to personally pay the remaining $10,000 or get the money from your best friend.
Transferring Your Car to Others
You allow a neighbor to drive your car. She, in turn, lets her young adult son drive it, and he gets into an accident. Under these circumstances, your insurance policy would still cover the damages. When you permit someone to use your car, you allow them to transfer it to others. As long as you gave the initial permission, your insurance will cover medical bills, property damage, and other accident-related expenses.
The only time insurance may not cover damages is if the person was driving outside the permitted area. That is why it is essential for anyone lending their car to a friend or relative to stipulate whether or not they can let someone else drive and exactly where and when they can use your vehicle.
Friend Has No Valid Driver’s License
You let a coworker borrow your car at lunchtime to run an errand, and she does not have a valid or current driver’s license. She gets into an accident. If this situation occurs and your coworker was not responsible for the accident, the other driver’s insurance should cover the costs. If the accident was your coworker’s fault, your insurance will still most likely cover the damages. Since your coworker does not have a driver’s license, they most likely do not have insurance. That means any costs over your policy limits will become your responsibility.
Take note that it is illegal to allow another person to drive your vehicle without a license in Virginia and most other states. In Virginia, it is a misdemeanor punishable by up to 12 months in prison and a possible fine of $2,500. You would need to prove that you did not know the person was unlicensed to avoid punishment.
Your Friend Flees the Accident Scene
You let your good friend borrow your car, and they get into an accident but flee the scene. Your insurance will still most likely cover the damages up to your policy limits as long as you permitted the person to drive your car. However, you will not be responsible for the person’s criminal conduct of fleeing the scene of an accident, which can be a misdemeanor or worse.
In all of these scenarios, the bottom line is that you will always carry some risk when you let someone else borrow your vehicle. You should always understand your potential liability.
Will My Insurance Rates Increase if My Friend Crashes My Car?
In most cases, your insurance is still going to pay for medical bills, property damage, and other accident-related expenses, regardless of who was behind the wheel. It is a pretty good bet that your rates will increase if the accident was your friend’s fault.
The insurer cannot raise rates if the accident was not your friend’s fault. However, they can drop you as a client if they realize you are lending out your car to other people, therefore, increasing their risk of insuring you.
Lending your car out to a friend, neighbor, coworker, or relative can affect your insurance record and potentially take money from your own pocket. Carefully consider whether lending your vehicle is worth any of these risks.
Virginia Beach Car Accident Lawyers can Defend Your Rights Against Negligent Drivers
Our Virginia Beach car accident lawyers will defend your rights if you are seeking damages for a car accident that was not your fault. At East Coast Trial Lawyers, we handle all types of car accident scenarios, and we can help you if you have any concerns. Call us at 757-352-2237 or contact us online to schedule a free consultation. Located in Virginia Beach, we proudly serve clients throughout Chesapeake, Eastern Shore, Hampton, Newport News, Norfolk, Portsmouth, and Suffolk, Virginia, as well as North Carolina and nationwide.
