Picture this. Your neighbor approaches you about borrowing your pickup truck to take some things to the local dump. You don't see a problem with that, and hand him the keys. Next thing you know you are getting a call that he has had an accident with your truck. You find out he is OK, and now you have to deal with your car insurance adjuster.
Talking to Your Car Insurance Adjuster
This is when you find out all kinds of car insurance information you didn't know about before. You thought, well he has insurance right? Well here is how it works in Ontario, Canada, and if you live somewhere else, it wouldn't hurt to talk to your car insurance adjuster for some insurance claims advice.
We did exactly this. We lent our pickup truck to a friend while his own truck was in the shop. He had full coverage on his own truck, and was a good driver. But what he did next has put us in hot water with our car insurance adjuster ever since!
He had to go somewhere, and let his wife drive the pickup truck we had lent to him. She put her two kids in the truck in car seats and went off to do errands. On the way home, she took a freshly graded road, was going too fast, and the back tire blew. She barrel rolled this truck three times!
Luckily and amazingly enough, no one was hurt. The children were strapped well in the car seat (but really a single benched pickup truck is no place for a child's car seat, this was a work truck!). Police, fire and ambulance responded. She refused medical treatment and then phoned me to tell me what happened. I almost fell on the floor.
I needed the police report, she didn't get one because the truck was not in her name it was in ours. So I had to track down this report for our car insurance adjuster. She didn't want me to claim this, as she wanted to pay for the truck, but there was still the possibility she was injured. I phoned my agent for some car insurance claims advice. So, she said I should report it, since there was already a police report.
Insurance Claims Advice
I did, and then I was not expecting the next problem. First of all I suddenly realized, I am just as guilty as everyone else about not reading all the fine print in the car insurance policy. Basically I got a crash course and insurance claims advice on how all of this works when you lend out your car or vehicle.
First of all, if they possess car insurance of their own, then they put in a car insurance claim for medical only. Their car insurance ONLY covers them for medical. YOUR car insurance has to cover property damage and your vehicle. Now if the accident was not their fault, then you can breathe a sigh of relief. But if it was, and they are hurt, they are covered with their own for medical only, NOT the car or other damage.
But what if they have a drivers license but no vehicle of their own? Therefore no car insurance. This is bad. This is when your insurance now has to pay for everything.
I got some stern car insurance claims advice from my car insurance adjuster. That basically when you lend your vehicle, you are basically lending your insurance to them. It is almost as if you are driving.
In my case, we thought because they were insured on their own vehicles that this would cover the accident. Not! It would cover her injuries. My policy has to cover the truck and any damage to property.
Luckily she and her children were not hurt. Contents in the truck just missed cows in a field, but if there had been injured live stock, I would have to make a car insurance claim to pay for that, and then you guessed it.. my rate goes up!
So, I told my car insurance adjuster, that I did not lend the truck to her, I lent it to her husband who has a better driving record than her. But the car insurance adjuster said that by lending it out, I had lost control of the vehicle and was still responsible for any damages it caused.
Auto Insurance Claim
We did not have collision coverage on this pickup truck, so they said they would pay for the truck... I am still waiting!. I had to report it to my insurance adjuster because there was a police report. I got a "slap on the hand" basically and my insurance rate will go up, even though there were no charges to her and no claims. The fact they even had to look at this police report counted as a claim.
So, if you must lend out your car, make sure you know the driver and that it is not going to someone else, and also make sure they do have insurance to cover their medical expenses or your insurance will be paying for that too, even if it is their fault.
Get some insurance claims advice, and you will probably get told by the car insurance adjuster that lending out your vehicle is a huge risk for you not them!
So, if your neighbor wants to borrow your truck to go to the dump or to move something, how about you help out by driving the truck for them! Explain that your insurance can't take that kind of claim. Once you hand the keys over to him, he has complete control of your vehicle and could easily lend it out to the neighbor across the road as well.
Get Insurance Claims Advice
Our car insurance is high enough. The only way I could have got out of this, was to claim that she stole the vehicle, which I couldn't do as she is the wife of our friend, but I know her driving record is not that good compared to his. I am angry with him for lending the truck to her. He did it innocently enough, but it was not his to lend. But we are paying the price with this black mark now on our record.
So, talk to your insurance adjuster or agent, and get some insurance claims advice and see just what you are covered for if you lend out your car. You may just drive them yourself!