Ask ERIE: Whose Insurance Pays When Your Friend Crashes Your Car?

It's a sticky situation when your friend crashes your car.

Auto insurance typically follows the car rather than the driver. This means that your insurance will likely pay if your friend crashes your car.

There are two exceptions. The first is when the damage and/or injuries exceed the available limits on your policy. In this instance, it’s possible that your friend’s insurance would kick in to cover the outstanding balance.

Another exception can occur when someone drives your car without your permission. “This can get confusing,” says Dave Freeman, vice president, Personal Lines Underwriting at Erie Insurance. “For example, imagine a college roommate grabs the keys and borrows another roommate’s car. Some courts say permission was implied; others say express permission was necessary. It really varies by jurisdiction.”

Will the accident go on my record or his?

When you let someone else drive your car, you are taking responsibility for their behavior. So the accident becomes part of your insurance history.

It’s also possible that your rate may go up. Your insurer bases the rate on your likelihood of filing a claim; when you loan your car to someone who may not be as careful or have as much experience driving as you, your rate needs to reflect that.

If you’re with ERIE, you can help avoid a rate increase with the ERIE Rate Lock® feature.* (Not available in New York or North Carolina. Limited to three years in Virginia.) Even if you have a claim, your rate won’t change unless you add or remove a vehicle from your policy; add or remove a driver from your policy; or change your primary residence. An Erie Insurance Agent can tell you more about ERIE Rate Lock®.

The accident may also show up on your friend’s driving record. This is especially likely if a police report gets filed after your friend crashes your car.

The lesson

Freeman advises drivers to be selective when loaning their cars. He also says it’s important to let your insurance agent know if someone else regularly drives your car. “If someone is a regular operator of your vehicle, you should add him or her as a driver on the policy,” says Freeman. “If you intentionally fail to disclose the person as a driver, the claim could potentially be denied if that person has an accident.” (The only exception is a spouse who lives in the same household— he or she is automatically a “named insured” on the policy.)

To learn more about auto insurance and ERIE Rate Lock®, contact an Erie Insurance Agent in your community.

*ERIE Rate Lock® does not guarantee continued insurance coverage. Insured must meet applicable underwriting guidelines. Premium may change if you change policy coverages, deductibles or pay plan.


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