I’m borrowing my friend’s car … am I covered?
Most people have an idea of what’s covered and not covered under their various insurance policies. However, at the Insurance Center of Milwaukee, we get a lot of questions about borrowing a car from someone or loaning a car to someone.
Now that summer is here (finally), and you might be looking to borrow your neighbor’s truck for a home-improvement project or a trip to the local landfill, we thought it was a great time to provide a little more information.
Generally, in Wisconsin, insurance coverage follows the vehicle first then the driver. In most instances, as long as the car’s owner has insurance, it’s covered even if someone other than the owner is driving it — as long as they have the owner’s permission and do not have regular access to the vehicle (for example: they don’t live with the person whose car they are borrowing).
The borrower’s insurance is considered secondary, meaning that in the event of an accident, it could apply if the owner’s insurance is insufficient to fully cover the damage.
It’s important to note that there are some exceptions to what is called “permissive use” coverage. As stated earlier, permission must be given by the owner, unless the borrower has a reasonable belief that they are allowed to use the car. However, the borrower cannot give permission to someone else.
Coverage might also be denied if the borrower operates the vehicle in a negligent or criminal manner. If the borrower is using your car for business purposes, your personal auto policy likely won’t cover that either.
If you have a regular long-term arrangement to either borrow or lend a car, the borrower should probably be added to the owner’s personal auto policy. Those who don’t own a car, but often borrow one, should consider “named non-owner coverage,” an endorsement that provides bodily injury and property damage liability, uninsured motorists coverage and more.
Ultimately, it’s usually safe to loan your car for occasional errands or projects. And the same goes for borrowing a car. Just make sure it’s for “normal” use. You’ll want to confirm that the car has coverage and that your insurance, whether you’re the owner or borrower, will apply.
Feel free to give us a call at 414-744-6614 if you have any questions — after all, you don’t want to wait until after an accident to get answers!