If you rely on your vehicle to get to your job, you want to make sure you protect it. That means you’ll want to avoid lending your car out to people who aren’t on your insurance policy.
Most car insurance policies will cover anything that happens to your car while anyone is driving it, as long as that person has permission to drive your car. But in the event of a collision, you and the borrower both have to deal with the consequences.
Even though your insurance will cover the accident, your premium is likely to go up. If the damage to the others involved in the accident exceeds your insurance limits, the driver who was in your car at the time may have to make up the difference with their own insurance. And in the worst-case scenario, if your friend doesn’t have their own insurance, a serious accident could leave you on the hook for all damages, even if it exceeds your coverage.
It sounds mean to say no when someone asks to borrow your car. But if neither party can afford to pay the consequences in the event of an accident, it’s best not to do it at all.