Loaning out your car to a friend is a nice thing to do, but it can turn into trouble if your friend wrecks your car while it is in his or her possession. What happens after this may require negotiations with the insurance company, but it also may require hiring an auto accident attorney. Here are several factors that will affect the results of a case like this.
Who Is At-Fault?
The first thing that will determine the outcome of this situation depends on who caused the accident. If the other party involved was responsible for the accident, you should not have any problems. The other person's insurance company would pay for the damages to your car and to their own car, and everything would be fine.
If your friend caused the accident, the situation could also get messy. Your insurance would most likely cover the damages, but you would end up owing the deductible, which could be $500 or $1,000. If the damage is major, your insurance company might go after the driver's insurance company for the damages. This generally works out fine, but there can be a problem if your friend did not have auto insurance.
What Happens If There Is No Insurance?
When you loan your car to a friend, it's important to make sure the person has insurance. If your friend did not have insurance and your insurance company refused to pay, the other party involved could actually sue you for your own personal assets.
If the other party did not have insurance, a problem could occur, but it will depend on how much damage is done. Driving without insurance is illegal, but people still do it. This is why car insurance policies contain coverage for:
- Underinsured motorist – this coverage kicks in if the at-fault driver's insurance coverage was not sufficient.
- Uninsured motorist – this coverage kicks in if the at-fault driver did not have any insurance.
Trying to negotiate in a situation where someone does not have insurance is not an easy case, and the owner of the car (which is you in this example) is usually the one that ends up with negative consequences.
How Will This Affect Me?
There are many different outcomes that may arise from this type of situation, and it will really depend on how the insurance companies decide to handle things. If your insurance company ends up paying out for the damages of this accident, you can expect:
- Increases in your insurance premiums – this accident is likely to be held against you because it is your car, and accidents on your record will make your insurance costs go up.
- To lose money – if you are required to pay a deductible, this money will probably have to come out of your pocket unless your friend offers to pay this.
If the other party is not satisfied with the offer from the insurance company, this case might end up in court. The other party may have the right to sue you, and this could result in you owing money to that person.
One thing you can do in this situation is to hire an auto accident lawyer like Schiller, Kessler & Gomez, PLC. Your lawyer may be able to help you find a way around paying money, and he or she might even suggest suing your friend because of this. While this might not be good for the friendship, it might be the only way you can settle the matter.
When you loan your car to a friend, make sure he or she has a driver's license and auto insurance coverage. This will help you protect yourself, your vehicle, and other drivers on the road.