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Does insurance cover your car if someone borrows it?
What happens if you lend someone your car and they have an accident?
When friends or family ask for a favour, it can be hard to say no, especially if it’s someone who has bailed you out of a sticky situation before. But what if the favour is borrowing your car?
Before you hand over your keys, no matter how much you might trust the borrower, you must ask some important questions first.
Will your insurance cover accidental damage?
Each insurance company has its own set of rules and conditions. Some policies may exclude coverage if anyone other than the insured driver has an accident driving the vehicle.
That’s why you should never pretend that you are the regular driver when you insure your vehicle if someone else – like your child, who has less driving experience – is the regular driver. If they have an accident, your insurer might reject the claim based on misrepresentation. If you’d told your insurer who was the regular driver, your policy premium would have been adjusted to cover their higher risk profile.
Always check your individual policy to understand what terms and conditions apply to non-stipulated persons driving your vehicle.
For instance, Nedbank’s terms and conditions state that if someone else drives your car with your permission and they cause an accident that damages someone else’s property, your insurance will cover the costs of that damage. We’ll also cover the damage to your car (up to a payable limit set out in your policy document), provided that the driver is compliant with the terms of your policy. They must also not be claiming from another insurance policy.
However, you will not be insured if the driver:
- was driving under the influence of alcohol or drugs, failed a breathalyser test, or had a blood alcohol level over the legal limit, or
- didn’t have a valid driving licence, or had a licence with endorsements for offences like reckless driving or driving under the influence.
What if someone has an accident driving your car?
If you lend someone your car and they call you to tell you they’ve had an accident, make sure that everyone involved is okay and call for medical assistance, if needed. If possible, make your way to the accident scene. If you can’t, ask the driver to take pictures and video of the damage.
If another vehicle is involved, ask for the driver’s details and the specifics of the damage caused to their vehicle.
A car is an expensive asset, so if you don’t feel comfortable lending it to someone, it’s okay to say no
Contact your insurance provider to give them all the available information and let them know that you were not driving the vehicle. They will then inform you of the steps to take to file a claim, including reporting the accident to the South African Police Service, if the police were not present at the scene of the accident.
Never lie to your insurance company, as they do in-depth investigations into claims. If you are found to have lied on an insurance claim, your insurance company can reject your claim and you can be charged with insurance fraud and end up with a criminal record.
What if someone uses your car to commit a crime?
It may seem far-fetched, but you often don’t know friends (and even family) as well as you think you do. Sometimes, a person could betray your trust because they don’t think they have any other options. If someone borrows your car without telling you they plan to use it for something illegal, what consequences might you face?
It depends, to an extent, on the offence. If they use it as the getaway car in a robbery and you can show that you had no idea that was why they wanted to borrow it, you wouldn’t be legally liable, although it might be difficult for you to prove this.
Ironically, it may be more trouble if they commit a less serious traffic offence, like illegal parking or speeding. If they’re issued a ticket, it will include your car registration details. If you can’t get the person who borrowed the car to pay the fine, the demands for payment and, potentially, a court summons, will be addressed to you and you could be held legally liable to pay it. Someone else’s unpaid fines could also prevent you from renewing your vehicle registration every year.
Note also that if your car is used by someone while they’re committing a crime, it could be impounded as part of the criminal investigation. This is not something that’s generally covered by your insurance policy.
What to do before lending someone your car
Before you let someone use your vehicle, make sure that you are 100% comfortable with the decision, and the possibility that they may have an accident. Go through your insurance information and contact your insurer or broker if you have any questions.
Examine your vehicle thoroughly and ensure that everything is running smoothly. Make sure that your licence disc and registration information are up to date.
Tips before you hand over your car keys
1. Set out the ground rules with the person borrowing your car, such as where and for what the vehicle will be used, and make sure they agree to the rules.
2. Make sure that the person borrowing the car knows that only they are allowed to drive it.
3. Check that they have a valid driving licence.
4. Remind them that any speeding tickets or fines they incur will be their responsibility.
5. If you’re lending them your car with a full tank, make sure they know they need to return it with a full tank.
A car is an expensive asset, so if you don’t feel comfortable lending it to someone, it’s okay to say no. If you know that the person asking is a high-risk driver, but you owe them a favour, perhaps find a time that suits you both when you can drive them to wherever they need to go. And never lend your car to someone if you know they won’t be covered by your insurance.
Learn more about vehicle insurance from Nedbank.
