When you loan out a vehicle to a friend or borrow one from someone, the insurance that is on the vehicle is what will follow the vehicle. You can't get insurance on yourself and the way that you drive. This means that you are covered only up to what the car owner's policy on the vehicle covers.
In these cases, it is important to remember some key points about what happens when there is a car crash in a borrowed vehicle. These common questions and answers might help you sort through the situation.
Are all drivers covered on a car's insurance policy?
There are instances in which drivers aren't covered on a car's insurance policy. One is if the car is taken without the owner's consent. Another is if the person who is driving is listed as an excluded driver on the policy. In both of these cases, the car insurance wouldn't be considered valid.
What happens if the insurance on the car doesn't cover the accident?
If the insurance on the car doesn't cover the accident, the driver who crashed would likely be liable. There is a chance that the vehicle's owner could also be liable if he or she knew that the person who they let borrow the car was intoxicated, on drugs or otherwise unable to drive.
Understanding what happens when you are involved in an accident with a borrowed car might help you to determine your options. It is imperative that you think carefully about what you are going to do and who you are going to turn to for compensation.
Source: FindLaw, "Borrowed Car Accidents: Who Pays?," accessed July 05, 2017