Lending your car to your friend

We've all done this...either lent it out to a friend or borrowed one from them.  No problems, right?

Here's the problem.  You lend your car to your friend.  Your friend is in a car accident.  Who's responsibility is it for the damages?

Unfortunately, in most cases, you are as the owner of the car.  You will need to file a claim with your insurance company and you will be responsible for the deductible.  Okay, your friend says he/she will cover the deductible because they feel horrible.



It gets worse....a claim has been filed on your auto insurance and we all know what that means. Possible higher premiums because we know that Insurance Companies only want perfect drivers.  

Now it gets worse:  We've talked about understanding your policy and what it covers.  Let's say you have the minimum (Colorado) $25,000/$50,000.  Your friend who was driving your car had two other people in the car with them when the accident occurred. Now each person is entitled to the first number $25,000 max BUT since there were three in the car....the $50,000 kicks in and now that is divided between the three.  We talked about Single vs. Multi-Car accidents so let's assume this one was a multi-car accident.  Your friend hit a car that had two people in it.  Now that $50,000 is split between the five of you.  I don't know about you but my car accident medical bills far exceeded $10,000.  

Remember, in most cases, your insurance covers the car not the driver.  (Which really bothers me because it it the driver's credit and claim history that helps determines the premiums...but who am I, right?)  There are some occasions (check your state and insurance policies) that once your insurance has reached policy limits that your friends' insurance may kick in.  

Other factors that you need to consider:  

• Negligence:  If you lend your car to someone you know SHOULD NOT BE DRIVING (example: intoxicated) and they cause an accident which results in death.....you may be at risk for a wrongful death suit.
• Comparative Negligence:  Assigning blame through percentages.  If you auto insurance policy covers other drivers the claim may be split between your policy and the other vehicle's policy.  (Check your state and your policy)

When the policy limits have been exhausted the injured parties can now sue you personally.  Do you own a home?  Do you have any assets?  If you do they are vulnerable to a lawsuit.  All because your friend needed to borrow a car.  

I'm not saying don't lend your friend your car.  I'm saying if you do you need to know what responsibility you may have if there is a car accident.

Please check with an Attorney to know what your rights, responsibilities and possible outcomes of this situation may be.  Remember your auto insurance is there for your protection; just in case.....but they fight the claims.  Your best protection is knowledge and the best way to know your rights is to speak with an Attorney.


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The information provided here is not to be construed as legal advice.  Please consult an Attorney if you have any questions.  General questions about Colorado Personal Injury can be asked here and Carol Zeisler will gladly assist you in the proper direction for your situation.