“may I borrow your car?”
A simple enough question. Perhaps your granddaughter or your neighbor’s son made this simple request of you. How did you respond? Many people would say yes to such a “simple” request – it seems harmless enough. But what’s the downside?
First off, if the person asking does not have their own auto insurance policy, then any accident would come back to your policy. Furthermore, if they or you are not insured properly, and a liability is incurred due to damage to someone else’s property or personal injury, you could be out of pocket a significant amount.
In the most obvious case, if your liability limits are too low – let’s say $25,000 – and the person who borrows your car gets into an accident, you could end up with the bill. For example, crashing into a high end sports car, and injuring the driver could cause liability upwards of $100,000 or more. If your liability coverage does not meet or exceed that, you may be forced to write a check. This is especially true if the person who used your car HAS NO CASH.
What should you do to help protect yourself? 2 simple steps to start:
1. A thorough insurance review with an eye toward liability risk
2. Try not to let anyone else drive you car – if they must, then make sure they are insured and if not, make sure you have excellent liability coverage.
Avvo has a nice summary on auto accidents: Avvo – check it out