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Ask ERIE: Whose Insurance Pays 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.”

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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.

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.

The insurance products and rates, if applicable, described in this blog are in effect as of July 2022 and may be changed at any time. 

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.