One of the questions that I am asked consistently, by clients varying in age and gender, is whether they can lend their vehicle to a friend, a neighbor, a loved one. It a simple query, I mean who hasn’t let their grandchild borrow their car, or had a friend drop them off at the airport and drive their vehicle back home to avoid the parking fees?
The question is easily answered by a phrase that you will hear often in our brokerage, “when you lend someone your vehicle, you are lending them your insurance”.
There are two main requirements imposed by your insurance provider when you are lending someone your vehicle: That said person has a valid Ontario Driver’s License, and that they have the owner’s permission to operate the vehicle in question. If those requirements are met, then you will have no issue in the event of a claim. However; it is crucial to understand that in the event of a claim, if the person driving your vehicle is at fault to any degree, YOUR insurance record is tarnished. Even though you were not the one that had the accident, your rates and coverages will be impacted as if you yourself were driving.
It is also important to note that this situation applies itself to companies that will drive you and your vehicle home from an event. It is a common misconception that because these companies operate a business as a provider of designated drivers, any damage their driver’s do will be covered by the company, this is not the case.
A woman in Toronto learned this the hard way when she was being driven home, in her own vehicle, by a designated driver service. The weather conditions were poor and the driver undershot the woman’s driveway. They found themselves in the culvert bordering the woman’s property. The vehicle was an SUV so the driver decided to try and drive out. The result was extensive damage to the bottom of the paneling along the entire driver’s side of the vehicle. When submitting the claim and providing the designated driver’s information, her adjuster informed her that this would be considered an at fault accident. This is because she was in care and control of her vehicle when she allowed the individual to drive her home, and as a result her insurance was the only point of payment in the event of a claim.
As a vehicle owner and depending on our responsibilities or lifestyles, it is quite common, and sometimes crucial, for us to lend our vehicles to other. It is just important that we remember that we are lending our insurability as well.
For more information, or clarification, be sure to contact your Registered Insurance Broker.