Loaning Your Car

Loaning Your Car

At some point in time, you may have offered your car to someone to drive or been asked to use your vehicle for various reasons. Perhaps your neighbor asks to use your vehicle to go to the grocery store because her car won’t start or maybe you loan your car to a friend in need while her car is being repaired. Regardless, you may not think much of it until an accident occurs and suddenly your concern grows. Is it a good idea to loan your car to someone?

Imagine loaning your car to a friend who then causes an accident while driving your car. If your friend is at fault for the accident, you may assume that her insurance would be primary to cover any subsequent bodily injury or property damages, but in reality, insurance coverage typically follows the car and not the responsible driver. Simply put, YOUR insurance is primary and what originally seemed to be a thoughtful act can turn into a financial drain.

Understanding Who Qualifies as a “Named Insured”

Your Florida auto insurance policy clarifies who is considered a “named insured” and typically the named insured is the first person named (policyholder) who pays the insurance premium; however other people may qualify as a named insured under the Florida auto insurance policy such as the following:

Spouses of the Policyholder (Domestic Partners)- Your spouse or documented domestic partner is considered a “named insured” but someone living in your household who is not a spouse or family member is not an insured driver.

Relatives of the Policyholder Residing in the Home- Any family member residing in your home is considered to be a “named insured” under your Florida auto insurance policy.

Anyone with Permissive Use- If you give someone permission, whether implied or expressed, typically there will be coverage granted. However, keep in mind that some situations are not clearly obvious and further investigation may be required to tie down “permissive use.” Someone driving your car without permission has no coverage under your auto insurance policy.

*Communication with your local Florida independent insurance agent is recommended regarding any regular users of any vehicles listed on your auto insurance policy.

Think Twice Before You Loan Your Car

The next time someone asks to borrow your car or you contemplate lending your car to someone, think twice! Auto accidents happen all too frequently and lending your car to a friend or neighbor may result in some serious financial consequences. Consider the following situations and then ask yourself if you can afford to have this happen:

  • Your friend’s car is being repaired and she asks to borrow yours for a week. She causes an accident involving serious bodily injury to the other driver and not only is your friend charged with causing the accident but is also charged with DUI. Because she had permission to drive your car, your insurance will be primary. This will result in a higher insurance premium!
  • Your boyfriend asks to use your car to go to the store and you gladly hand over the keys. On the way to the store, he causes a major accident involving multiple injuries and property damage claims. Later you find out your limits of liability on your Florida auto insurance policy have been exhausted AND you are now faced with a lawsuit.

Before handing over your keys, consider the financial consequences. Ideal Insurance Agency is here to assist with any questions regarding loaning your car to someone or any other issues relative to any of your Florida auto insurance needs. Call us TODAY at 941-921-2102!