Can I Rent My Car to a Friend
Is lending your car a total loss?
You lend your car to a friend, and this person gets into an at- fault accident and totals it. What are the consequences? You may be surprised to learn that almost half of Canadians don't know the answer . An agent from the claims centre answers this real-life situation.
But our best tip? If you need to add someone to your policy, do it through our app! It's quick, simple and convenient. Download it here !
"One day, one of my co-workers who doesn't have a car needed one to do some shopping. He asked if he could borrow mine. I agreed, figuring that people lend their cars all the time. As it turned out, he ran a red light and was involved in a collision. My car is a total loss. My co-worker doesn't carry car insurance . Am I covered for this and how will this affect my insurance?"
A response from Melanie, Claims Centre Agent.
Despite your friend driving your car and getting into an accident, the damage may still be covered under your own car insurance policy, depending on the type of coverage you carry.
For this particular incident, in which your friend is responsible for the accident, you would have to be carrying collision insurance (Section B2) in order for the damage to your vehicle to be covered, whether it is a total loss or simply requires a repair job. A deductible will apply.
Insurance companies such as belairdirect will only add an additional driver if they're a regular and frequent driver. That's why it's important to notify us, so that we can check whether your friend should be added to your policy as a driver and to confirm your permission to have him drive your car.
Even though your friend doesn't have an insurance policy in his own name, a record of the accident will be entered in your friend's file in a database of claims information, such as the AutoPlus system in Ontario. In this situation, the claim will show up on AutoPlus under the vehicle owner. If your friend eventually decides to get his own car, this incident will also show on his AutoPlus history. Essentially, the claim will follow both the driver and the vehicle owner.
If your friend had injured a pedestrian, there are rules as to which policy provides compensation and when depending on your province, and payment will be made in accordance with these rules.
To summarize:
– If you allow someone with a valid driver's licence to drive your vehicle, your policy will provide coverage in the same way as if you were driving yourself. The same limits, deductibles and conditions will apply.
– If you allow someone else to drive your vehicle, you will be held responsible for any accident (claim) in the same way as if you were driving yourself.
– If you allow someone else to drive who does not live with you, there is no need to notify us unless they will be driving frequently over a longer period of time. It is your responsibility, however, to ensure that they have a valid driver's licence before allowing them to drive.
– In the case of someone who lives with you, as long as they have a valid licence, they may still drive with your permission, and your coverage will be as if you were driving yourself. That said, you do have a responsibility under your policy to advise us of other licensed drivers in your household and should discuss the situation with us to see if that driver should be added to your policy. Failing to do this will go against the conditions of your policy and may have further consequences depending on the situation.
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Source: https://www.belairdirect.com/blog/claims-question-lending-your-car-to-a-friend
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