FRIDAY, SEPTEMBER 2, 2011
"Hey, can I borrow your truck on Saturday?"
Without a second thought, most people would toss over the keys to allow their friends or family to borrow their vehicles. While these situations are usually harmless, what happens when they end with a crash? When the insurance companies get involved, this situation can end up anything but harmless.
 Generally speaking, the insurance policy travels with the vehicle, not the driver. Therefore, the vehicle owner's policy will assume most claims. If the owner's policy is not enough, the driver's policy may kick in as a backup to make up the difference.
"Well, he said I could borrow it last month, so I'm sure it's OK today." In order for the vehicle owner's policy to cover any damages, the driver must receive explicit permission from the policy holder. The only exception to this rule is if the driver is an adult member of the immediate family by blood, marriage or adoption. So, your buddy must have permission to borrow your truck, but your daughter does not.
"It's just for today...and maybe tomorrow...I'll definitely have it back to you by next week." It is also important to remember, most auto policies will cover the occasional, lend-me-your-car-type of scenario, but they will not cover a driver who has been using the car for several weeks. If someone is going to be borrowing your car frequently, or on an extended basis, they need to be added onto your policy.
"Ok, but it's the company truck, so be extra careful." Lending your company car is not OK and will only complicate things in the long run. Allowing someone else to drive a vehicle issued by your employer is most likely a violation of the company's commercial auto insurance policy, which means the insurance company will not cover anything.
"I just got my license, ask your mom if we can borrow the car to go to school." Before allowing anyone under the age of 25 to drive your vehicle, check with your insurance company. Some policies will not cover any damages for an "uninsured" driver who is underage. This can sometimes include your own children, so be sure to add them to your policy as soon as they come home with that dreaded learners permit.
"Dude, have you seen my car?" As soon as you notice your car is missing without your permission, notify the police. If your car is in an accident, even if it was stolen or is being driven without your knowledge, you could still be held liable for damages.
It is not possible to notify your insurance company of every person who may borrow your car at some point in time. So take the time to review your policy so you know what actions are in violation, and before you toss over the keys, consider whose hands they are falling into.
By Matt Reynolds - Google+
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