What Happens If I Let Someone Drive My Car and They Crash?

Your Insurance Pays First (Primary Coverage)

When someone drives your car with permission and causes an accident, your auto insurance is the primary coverage.

What your insurance covers:

1. Liability for injuries and property damage • Pays for damage to other vehicles and property • Covers medical bills for injured parties • Pays up to your liability limits (e.g., 100/300/100) • Applies even if the driver is at fault

2. Damage to your vehicle • Collision coverage pays for damage if you have it • You pay your deductible (typically $500–$1,000) • Your insurer repairs or totals the vehicle • Applies regardless of fault

3. Driver and passenger injuries • Medical payments (MedPay) or personal injury protection (PIP) covers the driver's and passengers' medical bills • Applies if you carry these coverages • Pays up to policy limits

Example scenario:

You lend your car to your friend. They run a red light and crash into another vehicle.

• Your liability insurance pays for the other driver's vehicle repairs and medical bills (up to your limits)
• Your collision coverage repairs your car (minus your $500 deductible)
• Your friend's insurance only pays if damages exceed your coverage limits
• Your insurance rates likely increase at renewal

Why your insurance pays:

Insurance is attached to the vehicle, not the driver. When you give someone permission to drive your car ("permissive use"), your policy extends coverage to them. This protects injured parties and ensures vehicles are always insured.

For more on how liability coverage works, see our guide on liability car insurance explained.

When the Driver's Insurance Covers Excess Damages

The driver's insurance acts as secondary coverage if damages exceed your policy limits.

Example: Insufficient liability coverage

You have minimum liability coverage (25/50/25). Your friend causes a serious accident:

• Total damages: $150,000 in injuries, $30,000 in property damage
• Your insurance pays: $50,000 for injuries, $25,000 for property damage
• Remaining liability: $100,000 in injuries, $5,000 in property damage
• Driver's insurance pays: The remaining $105,000 (if they have adequate coverage)
• Personal liability: If the driver lacks insurance or sufficient coverage, you and the driver are both personally liable

How secondary coverage works:

• 1. Your limits are exhausted first
• Your insurer pays up to your policy maximum
• Claims adjuster documents total damages

• 2. Driver's policy covers excess
• Driver files a claim with their insurer
• Their liability coverage pays remaining damages
• Their rates increase, not yours (for this portion)

• 3. Both policies may be tapped
• Complex claims involve both insurers
• Coordination of benefits determines who pays what

Why this matters:

If you carry minimum liability and lend your car, you're exposed to significant personal liability. The driver's insurance helps, but only if they have coverage. An uninsured or underinsured borrower leaves you vulnerable.

Protection tip:

Carry at least 100/300/100 liability limits. Higher coverage protects your assets when you lend your vehicle.

For guidance on adequate coverage, read how much car insurance do I need.

How Much Will Your Rates Increase?

Your insurance rates will likely increase after someone crashes your car, even if you weren't driving.

Rate increase factors:

1. Accident severity • Minor accident (under $2,000): 10–20% increase • Moderate accident ($2,000–$10,000): 20–40% increase • Major accident (over $10,000 or injury): 40–60% increase • At-fault fatality: 50–100%+ increase, or policy cancellation

2. Your driving history • Clean record: Smaller increase (accident forgiveness may apply) • Previous claims: Larger increase • Multiple claims in 3 years: Risk of non-renewal

3. State and insurer • Rate increases vary by state regulations • Some insurers are more forgiving than others • Accident forgiveness (if you have it) may prevent increases

4. Who was driving • Listed driver: Expected increase • Unlisted household member: Larger increase (insurer may require adding them) • Permissive use (occasional driver): Standard increase

Typical rate impact:

• Average increase: 20–40% for at-fault accidents
• Duration: 3–5 years (varies by state)
• Cost over time: $300–$1,000+ annually, totaling $900–$5,000+ over 3 years

Accident forgiveness:

If your policy includes accident forgiveness, your first at-fault accident may not increase rates. However: • Usually requires clean driving record • One-time benefit • May not apply if the driver was excluded or uninsured

Mitigating the impact: • Shop for quotes after an accident (rates vary widely) • Consider usage-based insurance programs • Bundle policies for discounts • Increase deductibles to lower premiums

For strategies to lower costs, see how to lower car insurance.

Who Pays the Deductible?

You (the owner) pay the deductible when your car is damaged, even if someone else was driving.

How deductibles work:

1. Collision deductible • Applies when your car is damaged in a crash • You choose your deductible ($250, $500, $1,000, etc.) • You pay this amount before insurance covers repairs • Example: $5,000 in damage, $500 deductible → you pay $500, insurance pays $4,500

2. Comprehensive deductible • Applies to non-collision damage (theft, vandalism, weather) • Usually lower than collision deductible • You pay before insurance covers repairs

Who's responsible:

• Legally: You (the owner) are responsible for the deductible
• Morally: The driver may offer to pay, but it's not legally required
• Practically: You can ask the driver to reimburse you, but enforcement is difficult

Example:

Your friend crashes your car. Repairs cost $4,000. You have a $1,000 deductible.

• You pay: $1,000 deductible to the repair shop
• Insurance pays: $3,000
• Your friend: No legal obligation to reimburse you, but may offer

Getting reimbursed:

If the driver was not at fault: • File a claim against the at-fault driver's insurance • Their liability insurance may reimburse your deductible • Process can take weeks or months

If the driver was at fault: • Your insurance pays (using your collision coverage) • You pay the deductible • The driver has no legal obligation to reimburse you • You can request payment, but cannot legally compel it without a lawsuit

Best practice:

Before lending your car, discuss financial responsibility. A written agreement clarifies expectations, though enforceability varies.

For more on deductibles, read car insurance deductible explained.

When Your Insurance Won't Cover the Accident

Your insurance may deny coverage in certain situations:

1. No permissive use

• Vehicle was stolen
• Driver took car without permission
• Use exceeded agreed terms (borrowed for errand, used for week)

Result: Your insurance denies the claim; driver is personally liable.

2. Excluded driver

• You specifically excluded the driver from your policy
• Common for high-risk household members

Result: No coverage; you and driver are personally liable.

3. Commercial use

• Driver used your car for Uber, Lyft, DoorDash, or delivery without commercial insurance
• Personal auto policies exclude commercial use

Result: Coverage denied; driver and you may be liable.

4. Unlicensed or suspended driver

• Driver had no valid license
• License was suspended or revoked

Result: Coverage may be denied; check policy terms.

5. Intentional damage

• Driver intentionally caused the accident
• Racing, road rage, criminal activity

Result: Coverage excluded; driver is liable.

6. Material misrepresentation

• You failed to disclose regular drivers
• You lied about vehicle use

Result: Claim denied; potential policy cancellation.

Protecting yourself:

• Only lend to licensed, responsible drivers
• Verify they have permission for the specific use
• Add regular drivers to your policy
• Never lend for commercial use without proper insurance

For more on coverage exclusions, see what does car insurance cover.

If someone crashes your car, follow these steps to protect your rights and coverage:

Immediate actions:

1. Ensure safety • Check for injuries • Call 911 if needed • Move vehicles to safety if possible

2. Call the police • Get an official accident report • Document the scene • Obtain report number

3. Document the accident • Take photos of all vehicles • Record damage • Get witness contact information • Note time, location, and conditions

4. Exchange information • Driver's license and contact info (your friend) • Other driver's insurance and contact info • Vehicle details

5. Notify your insurance immediately • Report within 24 hours (required by most policies) • Provide all details • Be honest about who was driving and why

Claims process:

1. File a claim with your insurer • Your policy is primary • Claims adjuster investigates • Provide police report and documentation

2. Cooperate with investigation • Answer questions truthfully • Provide requested documents • Don't admit fault or speculate

3. Get repair estimates • Use insurer's preferred shops or get independent estimates • Review repair plan • Understand depreciation and totaling thresholds

4. Pay your deductible • Due when repairs begin • Discuss reimbursement with driver (optional)

5. Follow up on subrogation • If the other driver was at fault, your insurer may pursue their insurance • You may recover your deductible through subrogation

After the claim:

• Expect rate increases at renewal
• Shop for quotes if rates jump significantly
• Consider raising deductibles to offset premium increases
• Review who you lend your vehicle to

For claim guidance, see our article on liability car insurance.

How to Protect Yourself When Lending Your Car

Reduce your risk by following these precautions:

1. Carry adequate liability coverage • Minimum recommendation: 100/300/100 • Better protection: 250/500/100 or higher • Protects your assets if damages exceed limits

2. Maintain collision and comprehensive coverage • Ensures your vehicle is repaired regardless of fault • Choose a deductible you can afford ($500–$1,000)

3. Only lend to licensed, responsible drivers • Verify they have a valid driver's license • Know their driving history • Confirm they understand vehicle operation

4. Set clear expectations • Specify how long they can use the vehicle • Define acceptable use (errands, not road trips) • Discuss who pays deductibles if something happens

5. Verify the driver has their own insurance • Provides backup coverage if your limits are exceeded • Reduces your personal liability exposure

6. Add regular drivers to your policy • Household members must be listed • Frequent borrowers should be added • Prevents coverage denials

7. Consider saying no • If you're uncomfortable, decline politely • Your financial well-being is at stake • Offer alternatives (rideshare, rental car)

8. Review your policy's permissive use clause • Understand restrictions (age, frequency, duration) • Some policies limit permissive use to specific situations • Verify coverage before lending

When not to lend your car: ✗ Unlicensed or suspended driver ✗ Driver with DUI or serious violations ✗ Uninsured driver ✗ Commercial use (Uber, delivery) ✗ Extended trips (multi-day, out-of-state) ✗ Driver under influence

Bottom line:

Lending your car transfers financial risk to you. Protect yourself with adequate coverage, careful screening, and clear communication.

For more on coverage recommendations, see how much car insurance do I need.

Frequently Asked Questions