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If you lend your car to a friend and they are involved in an accident, your car insurance will foot the bill. An insurance policy follows the car, not the driver, so even if your friend has their own insurance, it’s your insurance company that will pay the claim.

Because the claim will be filed with your insurance company, it’s your insurance rates that will go up as a result of the claim. That’s why it’s so important to be cautious about lending out your car.

Read on for more information on how insurance works if a friend wrecks your car (or you wreck theirs).

Key takeaways

  • Loan out your car only when you trust the friend driving, as you’re responsible for anything that happens.
  • If your friend was at fault for the accident, you must file a claim against your own collision coverage and pay the deductible.
  • If your policy limits for liability coverage are exceeded, your friend’s insurance policy will be secondary; that means it kicks in only after your coverage is exhausted.

Whose insurance pays if a friend crashes your car?

Loaning your car out can have serious repercussions. You are lending your car insurance, too. Insurance follows the car, not the driver.

You may not have been behind the wheel, but it’s your liability insurance that will pay for any damage or injuries to others. If your friend is at fault and your car needs repairs, you must file a claim against your own collision coverage and pay the deductible.

What happens if you don’t have enough coverage?

In a serious accident, your policy limits may quickly be exceeded.

What happens next depends on your friend. Assuming they have car insurance of their own, their policy will pay out to cover the remaining damages up to their policy limits. However, they may have no insurance at all, making the situation even trickier than it already is.

But once both coverages are exhausted, you could be sued. Everything from your house and car to your retirement savings could be jeopardized.

What should you do if you crash a friend’s car?

Suppose you borrow a car from a friend and cause an accident. The damage is well within your friend's policy limits and will be covered in full.

What exactly are your options? While your friend is legally responsible, you may not be friends for long if you don’t help.

Technically, if you wreck someone's car, you can walk away if the damage falls within the vehicle owner’s insurance policy limits. "In regards to the car owner, you would not have any legal obligation to that individual. They made the decision to loan you the vehicle," Michael Rehm with The Law Office of Michael Rehm says.

In most cases, there will be no repercussions for you or your insurance rates. But you will almost certainly lose at least one friend. 

The friend could sue you to recover damages, but they must prove you were negligent. "As an example, if a deer ran in front of you and there was no way to avoid the accident, your friend will not be able to sue you," attorney Thomas J. Simeone of Simeone & Miller in Washington, D.C. says.

A better choice is to offer to pay whatever you can, including any deductibles or other costs your friend incurs. You could also offer to make up the difference if and when their rates go up.

Do you have to go through insurance if you crash a friend’s car?

If there is serious damage or anyone is injured, you need to file a claim. The same goes in most cases if another car is involved. But if you simply backed into a pole? You can pay your friend for the damage out of pocket and avoid filing a claim.

This will prevent an increase in insurance rates. However, you should make sure it won’t come back to haunt you or your friend; if damages aren’t repaired properly, for example.

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