If you lend your car to a friend and he gets into an accident, your car insurance will pay to repair the car for covered incidents. Insurance follows the vehicle, not the driver, so typically the car will be covered by your insurance policy regardless of who is driving.
In some instances, however, your insurer may not pay to repair your car if it’s wrecked by another driver. For instance, if you did not give the driver permission to use your car or if your policy has the person listed as an excluded driver you may not be able to file a claim.
Here are some other examples in which you may not be covered or have to pay a higher deductible if someone borrows your car:
- "Named-driver-only" policies will cover only those listed on the policy and not extend coverage to permissive users.
- "Step-down" policies lower liability coverage to your state's minimum requirements for permissive users, even if you pay for higher limits.
- Double deductibles for collision claims when a non-named driver is at the wheel.
- Policy coverages won't extend to a rental car.
Another thing to remember when you lend your car – if your friend gets into an accident with your vehicle and you file a claim, your rates are likely to increase because it’s your policy that’s covering the car. But if your friend gets a ticket while driving your car, the infraction will be charged to your friend because he was the operator of the vehicle.
If you want more detailed information on this topic, read "Insurance follows the car."