Letting a friend borrow a car can seem like a nice thing to do, especially if they’re in a tough spot and need a little extra help. However, it’s crucial to think about this carefully, as the simple act of lending a vehicle to someone could end up causing issues for the vehicle’s owner. If there is an accident, for example, it can cause serious repercussions for not only the driver of the borrowed vehicle, but the owner, too.
Legally Responsible for the Vehicle
The owner of the vehicle is considered legally responsible for the vehicle. Since insurance follows the vehicle, not the owner, their insurance company may have to pay out on a claim. This can make it more complicated when determining fault with borrowed cars, especially if the car was borrowed without explicit permission. The car’s owner may want to speak with a lawyer to find out whether their insurance company will need to pay on the claim.
Insurance Can Increase
Since the claim will be on the owner’s insurance policy, it is likely that their insurance premiums will increase. This happens after an accident and can occur no matter who was found at fault for the accident. It can be years before the rates are lowered again, so the owner will need to be able to pay the increased cost. Depending on the cause of the accident, it can be harder to find an insurance policy in the future, too.
Could be Criminal Liability
There are situations where the owner of the vehicle could be held criminally liable, even if they weren’t in the vehicle at the time. If they knowingly allowed someone who was under the influence to drive the vehicle, for instance, they could be held criminally responsible for the resulting accident. This could mean going to court and facing potential jail time, fines, and other consequences.
May be Financial Consequences
There are some situations where the insurance company will deny the claim, and the owner may need to cover the costs of the accident out of pocket. This can be extremely high, especially if the accident resulted in severe injuries or damages. Even if the insurance company does pay the claim, if the compensation to the victim is higher than what the policy will cover, the owner may be responsible for paying the difference. This can be incredibly expensive, as there are high costs associated with accidents.
Defense to Liability
Though the vehicle’s owner can be found civilly and criminally liable, depending on the situation, there are defenses that can help them avoid legal consequences if they allow someone to borrow their vehicle. It is incredibly important for the owner of the vehicle to speak with a lawyer to learn more about their liability in the specific situation and to find out if it’s possible to avoid paying out of pocket, having insurance premiums increase, or even facing criminal charges.
If you’re thinking about lending a vehicle to a friend, be sure to do so carefully, as it could have unintended consequences for you if they are involved in an accident. If you have loaned a vehicle and the driver was in an accident, speak with a lawyer to learn more about your liability and how to minimize any potential issues.