Do you lend your car to friends or family from time to time? If you do, you’re extending your insurance to those people every time they’re behind the wheel. Additionally, you may suffer financial loss if you are not careful about who else drives your car in case of an accident.
Here are additional precautions you should take to safeguard your financial interests before lending your car to someone:
Precautions for Occasional Lending
If you give your car to a friend or spouse once in a while, many insurance policies will cover you and your vehicle. However, that’s not always a guarantee as car insurance policies differ when it comes to the fine print. So, refer to the terms of your specific auto insurance plan before lending your car to anyone. Likewise, give a verbal or written permission for the borrower to use your vehicle.
Secondly, know a guest driver well before letting them drive your car, even if only once. Keep in mind that a crash involving the borrower of your automobile will tarnish your insurance record. That may increase your insurance premiums. It thus helps to avoid lending to people with a bad driving record.
Factors to Consider in Regular Borrowing
When you often share your car with someone, such as on a schedule, you have to notify your insurance company about it. For example, your insurance policy should name an assistant who drives your spouse to the shopping mall every weekend. Failure to do that may place the financial liability on you in case of a crash.
Car Sharing Companies
If you’re lending your vehicle via car sharing companies, neither you nor your car remains under your insurance policy. Such firms typically buy the necessary coverage for the rented vehicle and its driver. However, you still need to study the details of that insurance policy to guarantee you’re not taking a financial risk.
It’s noble to lend your car to friends, relatives, or even strangers. Nonetheless, there are significant financial and insurance risks involved. You, therefore, would do well to take the necessary precautions before lending your car to anyone. Contact us today if you would like help in choosing the best insurance plan for you or have questions around your current policy.