Does Lending My Vehicle Mean Lending My Insurance?
In this article (Does Lending My Vehicle Mean Lending My Insurance?) we shall answer the following questions;
A. Can I Lend My Vehicle?
B. What of If I Lend My Car to Someone Temporarily?
C. What Factors Can Affect The Cost of My Car Insurance?
D. How Can I Lower My Car Insurance Premium?
E. What Preventative Measures Can I Take Before Lending My Car
A. Can I lend my vehicle?
Of course, you can lend your vehicle. But it’s important to understand that lending your vehicle also means lending your insurance. That means that anyone who drives your vehicle with your consent has access to your insurance coverage in the event of a loss.
This applies to all types of vehicles, including seasonal vehicles such as ATVs or snowmobiles. It also applies to trailers. While the liability coverage of a trailer follows the vehicle towing it, any Physical Damage coverage, such as Comprehensive or Collision coverage, still exists under the primary automobile insurance policy. If you lend your trailer to someone else, your insurance policy will still cover any physical damage that may occur to the trailer.
Your vehicle, your rates. If you lend your vehicle to someone and they’re involved in an at-fault loss, your automobile policy will be impacted. Your premium could increase on renewal or you may no longer qualify for certain coverages.
There may be implications if you lend your car to someone not listed on your car insurance policy, especially if the borrower crashes your car. Consequently, you need to be aware of all such implications, as these might influence your decision whether or not to allow someone else to drive your car.
When you lend your vehicle to someone, it’s your auto policy that’s covering the driver, not theirs. That means if there’s an incident, be it major or minor, it’s your policy that’s affected — even if the borrower has coverage for another vehicle.
That means if your friend gets into a collision while behind the wheel of your vehicle, it goes on your insurance record, not theirs, and you’ll be filing a claim with your provider. Therefore, you’re not only lending them your vehicle, but you’re also loaning them your insurance record and policy.
It’s best to use caution when lending out your vehicle and, by extension, your insurance. Contact your agent or broker if you have any questions regarding lending your vehicle.
B. What If I Lend My Car to Someone Temporarily?
If you decide to lend your car to another person on a short term basis, you can take note of the following points:
Check to ensure that the borrower’s driver license is valid. If the borrower’s driver license is invalid, you as the car owner can also be held liable and charged by the police.
More high-end automobiles have restrictions on insurance such as limiting the number of drivers, or not allowing the car owner to lend the car. If you plan to lend your high-end supercar to your friend, it’s best to consult with your insurer or consider adding the borrower to your insurance policy.
Individual car insurance policies do not provide coverage if the car is used for business purposes such as driving for a ride-sharing company. Therefore, before you lend your car, you should be careful of what your car will be used for.
If you lend your car to a friend, who’s then in a car accident, this will make the claim process more complex. As a car owner, you need to prove that you did lend your car. According to our experience, as long as you can provide proof, the insurer will still be willing to process your claim.
If you’re borrowing a car through an app instead of a friend, you should read the terms and conditions in the app carefully. This is because the insurance secured by the driver will override your insurance, leaving your coverage separate from any accident and repairs that happen while the car is rented. However, the driver’s policy wording and how the car is used may affect you as well. If, for example, you use the app to lend your car to someone who then uses it for commercial purposes, the insurance may not cover this, meaning you will be held liable should anything happen. So you should read any potential documentation before agreeing to lend the vehicle.
We suggest that you report your actual usage of your vehicle to the insurer. For example, if your two children are constantly using your car, it’s best you add them to your policy. Otherwise, if the insurer finds that there are regular drivers not listed in your policy, they have the right to cancel your policy.
Most motor insurance policies in Hong Kong provide temporary cover when you lend your car to other drivers. But some of them do have their limitations or conditions (such as no commercial use). Thus, before lending your car, you should better go through your terms and conditions.
C. What factors can affect the cost of my car insurance?
A number of factors can affect the cost of your car insurance, some of which you can control and some that are beyond your control.
The type of car you drive, the purpose the car serves, your driving record, and where the car is garaged can all affect how much your automobile insurance will cost you.
Even your marital status can affect your cost of insurance. Statistics show that married people tend to have fewer and less costly accidents than do single people.
If you are buying a car for your teenager, the car you buy can affect your rates. Some cars carry higher premiums because of theft rates or poor safety ratings. Careful selection can bring better premiums over the length of the policy.
D. How Can I Lower My Car Insurance Premium?
1️. Consider insurers that offer discounts – Some will offer discounts for things like safe driving, going paperless, and more!
2️. Reduce your mileage – Carpooling, riding your bike, or walking can not only save you $$ on fuel but also on your car insurance.
3️. Get a car that is easy to insure – Insurers offer better rates to cars that are less expensive, considered less risky, and have low theft rates.
4️. Improve your credit – Individuals with little or no credit could end up paying more than 2 times as much on car insurance compared to those who have good credit.
E. What Preventative Measures Can I Take Before Lending My Car?
Before you lend anyone your car there are some actions you can take to limit the risk of possible loss, not to mention reducing a possible straining of friendship.
1. Your car should have compulsory third-party insurance, which is required in Australian states. This insurance covers drivers of your car, particularly in the case of an accident. Such insurance does not cover the damage to your car − this is where your car insurance comes in. However, about 2 00 000 Australians are without comprehensive car insurance; 600 000 of these uninsured cars are on NSW roads.
2. Before you allow a friend to drive your car, you should ask to see their product disclosure statement. This statement will show what they are covered for.
3. You could add your friend, partner, or family member to your insurance list. This may mean a slight increase in premium, however, this may be weighed against a total loss after an accident.
SEE ALSO : Difference between collision physical damage coverage and comprehensive physical damage coverage?
The risk is yours. In the end, your friend may pay for the damage, or even the excess; however, this is not a given.