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Lending your car or borrowing a friend's car

March 22, 2023

Once in awhile, do you drive a friend's car or let them drive yours? Have you ever wondered what would happen with your insurance if one of you had an accident?

Which insurance company would handle the claim? The owner's or the driver's? Does the auto insurance coverage apply to the car or the driver?

It's better to know the answers to these questions before you lend your car to a friend or borrow theirs. Below are a few things to think about: for more details, talk to your insurance company.

Have the insurance coverage and driver's licence talk

Generally speaking, auto insurance covers the car and any drivers named on the car's insurance policy. That being said, if as a "one-off" you lend your car to a friend who is not named as a driver on your auto insurance policy and they have an accident, your insurance could cover the damage just as if you'd been behind the wheel.

However, before you hand your friend your keys, take a few minutes to go over the following points:

·         Explain the limits of your insurance coverage.

·         Show them where you keep your certificate of insurance and vehicle registration papers.

·         Talk about the amount of your deductible.

·         Agree on who will pay the deductible if there's an accident.

Also, make sure your friend has a valid driver's licence.

Let's say your friend backs your car into a fence and damages it. No problem—the liability section of your auto insurance policy could cover the damage to the fence. And the damage to your car? It could be covered if you have collision coverage.

As part of processing your claim, someone will need to pay the deductible indicated in the insurance policy (often $500). So, who pays the deductible? Agree on this before letting your friend drive your car.

If you borrow your friend's car

You should have the same discussion! Make sure your friend has valid auto insurance to avoid problems. And ask your insurance company about your coverage for damage to vehicles you don't own.

No insurance? No thank you!

If your friend doesn't have auto insurance, don't borrow their car! If you're involved in an accident or if you're stopped by the police for any reason, you could get fined for driving a vehicle without the required insurance.

Your premium could go up, even if you weren't driving!

If you file a claim with your insurance company, your premium might increase. This means you could be stuck paying more for your auto insurance because of your friend's bad luck or carelessness.

Communication is key to avoid unpleasant surprises. Make sure you and your friend are on the same page before handing over your keys. If an accident happens, you'll know how to handle the situation—it will help save your friendship and a whole lot of headaches!

Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company. Desjardins®, Desjardins Insurance®, all trademarks containing the word Desjardins, as well as related logos, are trademarks of the Fédération des caisses Desjardins du Québec, used under licence. Certain conditions, exclusions and limitations may apply.

The terms and conditions of the coverages described are set out in the insurance policy, which always prevails.

These tips are provided for information and prevention purposes only. They are general in nature, and Desjardins Insurance cannot be held liable for them. We recommend using caution and consulting a professional for comprehensive, tailored advice.