What is covered when borrowing or loaning a car?

Summer is a popular time to borrow your neighbor’s truck for a home-improvement project. Here is what you need to know.

Generally, the coverage follows the vehicle instead of the driver. In most circumstances, as long as the owner of the car has insurance, it’s covered even if someone other than the owner is driving it — as long as they have the owner’s permission. The borrower’s insurance is considered secondary — it could apply if the owner’s insurance is insufficient to fully cover the damage, in the event of an accident.

There are some exceptions to what is called “permissive use” coverage. For example, permission must be given by the vehicle owner. The borrower should not give permission to another person to use the vehicle. Coverage might also be denied if the borrower operates the vehicle in a criminal manner. Business use, by the borrower, likely won’t be covered under your personal auto policy.

Ultimately, it’s usually safe to occasionally loan your car— just make sure it is for “normal” use. Feel free to contact us if you have any questions. Don’t want to wait until it’s too late to get answers!