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I scratched my friend's car. Who pays?

Posted on August 28   By Des Toups

My friend made me drive her car, and I scratched it with her in the vehicle. Is it my responsibility to pay?

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Actually, there are three separate issues here:

  • Whose insurance would cover the damage
  • Whether she should file a car insurance claim for a scratch
  • Whether you want to stay friends

Let's start with the first issue: Whose insurance pays for the damage? Insurance follows the car, and it covers the car and anyone the insured owner permits to drive it. If your friend has collision insurance -- which pays for damage to the car when the owner or a permissive driver is at fault -- then she could file a claim against her coverage for the damage you did.

Assuming she files a claim, there would be a deductible due. One of you would have to pay that. My vote would be you.

The second issue is whether she should file a claim at all. It's possible that a scratch may cost less to repair than the deductible. (See "The fender-bender: To claim or not to claim.") If so, one of you would have to pay for the repair out of pocket. My vote would be you.

Insurance isn't for everything, just the big things.

You should avoid making small claims against insurance when you can. If your friend already has a claim on her record, even a tiny claim could have big effect when her policy is renewed because multiple claims look like irresponsibility to an insurance company.

If she doesn't have collision coverage, that brings up the third issue: Do you want to stay friends?

Your own collision coverage, if you carry it, will not pay for damage you did to a borrowed car. It's between you and your friend to decide who pays. My vote would be you.

Unless there was gunplay involved in forcing you into the driver's seat, you had an opportunity to say no. Anyone who puts you behind the wheel of their car has a reasonable expectation that you will operate it responsibly. If you feel that you can't do that,  you should refuse.

There may have been extenuating circumstances, but if you two can't settle a difference of opinion, it's a matter for the courts rather than the insurance company.

Before you lend your car, think

When you let another driver behind the wheel of your car, you are lending that person your insurance as well. If that person hits another car while driving yours, then your liability insurance would pay for any damage to the other car and any injuries the other parties suffered.

To repair your own car, you'd need to file a claim against your own insurance. You, the owner, would be responsible for paying the deductible.

At renewal time, it is your insurance rates that would go up, even though you weren't driving.

While the friend who borrows the car might be cited for the accident and morally responsible (in your mind) for making good on damages, none of that matters to the insurance company that just paid your claim.

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Your son cannot borrow your insurance

Posted on August 22   By Des Toups

My son, who is 21, had his license suspended. He drove his car and got into an auto accident. He did not have auto insurance at the time. Can he use our insurance to cover the damages caused to the other driver?

No, your son cannot use your car insurance, and it’s probably a good thing for you.

Insurance follows the car, not the driver.

Had your son been behind the wheel of your car and hit someone, your liability insurance would have paid the other driver. (Your son’s insurance, if he had any, would kick in only after yours was exhausted.) Whether his license was suspended or not usually would not make a difference as long as your son had your permission to drive your car. 

While this sounds like a free pass to drive without a license, it’s not.

That’s because insurance companies treat a conviction for driving on a suspended license very seriously. Let’s say you live in Portland, Oregon, and he drives a paid-off 2007 Mazda 3. With a clean record, he’s pay about $1,604 a year for state-minimum liability coverage, according to rates delivered through Insurance.com’s quote-comparison tool.

With a conviction for driving with a suspended license and an SR-22 requirement for reinstating it, the cheapest premium we found was $2,448. With a $5,000 accident claim added on, the cheapest quote rose to $3,036 a year.

If your son were listed on your insurance policy, your rates would reflect the risk he poses. As it stands, he should expect hefty bills for insurance when he goes to buy another policy of his own.

Even though he is not a listed driver on your current policy, it’s possible that your insurance company may ask you to exclude your son as a permissive driver at your next renewal. That means he would not be covered under any circumstances if he drove your car.

This is a tough lesson for him.

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Do I have to insure a car that’s just sitting?

Posted on August 15   By Des Toups

My husband is deployed and will be gone for several months. We have two vehicles, one car and one SUV. I wanted to know if I can take the car off the insurance until he returns to save us some money. I don’t drive the car, so it just sits there. Is this possible?

Not only can you do so, it’s a smart idea. You’ll have to meet a few conditions, though.

First, you have to own the car outright. Any lender will insist that you carry comprehensive and collision coverage on the car to protect its interests; if you drop these coverages on a car that is financed, they will be notified and buy their own “forced-place” policy to protect your car at a very expensive rate.

Second, you’ll have to turn in your license plates. Why? Because any registered vehicle has to carry at least minimum liability insurance in nearly every state.

Third, your state may require you to file what’s called an affidavit of non-use, allowing you to legally own an unregistered and uninsured vehicle.

Fourth, you’ll also have to find a place to park the car besides a public road, even if it’s front of your house.

So, if you own the car, can turn in the plates and have a driveway or garage, you’re good. But what if you can’t do all of those things?  You might try putting the car in storage. Many insurance companies offer substantial discounts – as much as 90 percent -- for deployed members whose vehicles are stored on base or in a storage facility.

Lastly, let your insurance company earn its keep. Talk to your agent or the company’s customer service team. They can spell out options that might include cutting back on coverage, greatly reducing the amount of mileage that is calculated into your rates, temporarily dropping your husband off the policy, or turning  up a discount.

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Can Grandpa and Grandma drive our cars?

Posted on August 08   By Des Toups

I live in Florida with my father and mother-in-law. They have their own auto insurance for their vehicles, and my wife and I have insurance for our own vehicles (different companies). At times my in-laws use our minivan to take our kids out. If I exclude them from our policy and likewise on their part, would my insurance cover me in their vehicle, and theirs cover them in our vehicle? Would it be best to add them as drivers to our policy and likewise on their part?

The short answer: Don’t exclude them. Don’t add them to your policy. You’re fine as is.

Yes, licensed drivers living under the same roof are usually considered when an insurance company calculates your premiums, except in two instances:

  • When the other drivers have an insured vehicle of their own
  • Or when the other drivers are specifically excluded from your policy

In your case, your in-laws should not be “listed” drivers on your policy because they have a car and policy of their own. Your insurance company may ask about the additional drivers that public records show at the same address, and you may have to provide proof that they are insured.

They should not affect your rates at all, and you should be able to lend them your car occasionally as permissive users. You should be able to drive theirs as well.

Permissive users are covered by your insurance when driving your car. If they hit something, you pay for any damage they do to other cars or to yours, and for any injuries they cause as well.

Only when your insurance is exhausted would your in-laws’ insurance step in.

If you excluded your in-laws from your policy, they would not be covered in any way by your insurance – but you would still be liable as owner of the car.

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