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What you need to know before you Loan Someone your Car

Posted Jul 25th, 2016 in General, Auto Insurance, Did You Know?

Before you loan someone your car, it is essential that you are aware of what you are accountable for. After you realize your responsibilities, especially if an accident were to occur, you may change your mind.

Understanding the implications of loaning your car

Before You Loan Your Car, Youngs Insurance, OntarioOften if a friend or family member asks to borrow your car, you wouldn’t hesitate. However, most people are unaware of the consequences in doing so. If you loan your car to someone, your insurance follows that (insured’s policy) car, regardless if that person has their own auto insurance coverage.

If an accident were to occur, it would be the owner’s insurance (YOU) that would be accountable for the claim.  Furthermore, if the person who borrowed the car is at fault for the accident, it would be the owner’s insurance policy that would experience the potential increased insurance rates and accident deductible.

Considering the implications of loaning your car, it is important that you are confident that you are loaning your car to someone responsible and dependable.

What you must do before loaning your car

If you decide to loan your car to someone you know there are a couple things you must do beforehand;

  1. Check that the borrower has a valid driver’s licence, not expired.
  2. Check that all lights (brakes, signals, etc.) are working properly. If the check engine light is on, be sure to resolve that issue (or any others) prior to loaning your car.
  3. Speak with the individual who is borrowing the car and outline what they are using the car for, and what you will and will not permit with your car.
  4. Check that a copy of your car registration and insurance policy are in the car, and show the borrower where they can find them.

If you have any questions about your auto insurance coverage and what would be involved if you were to loan someone your car, please contact your Youngs Insurance broker today! If you are not already a Youngs Insurance customer, we would love to provide you with a no obligation quote, by clicking here.

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