How to Lend Your Car to a Friend Without Jeopardizing Your Car Insurance Rates

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Friends and favors go hand in hand. If one of your friends has ever asked to borrow your car, then you know the worry of something going wrong. You hate to say no, but you have to be realistic about their driving ability and history. If you decide to lend your car to a friend, read below for some tips to do it without jeopardizing your insurance rates.

Check Your Insurance Policy

Check the language in your insurance policy for specifics on what it says about lending your car to a friend. Some insurance providers give policyholders the option of adding additional drivers to the insurance coverage. This can vary by state and insurance company, but it is a good idea to consider adding your friend to the policy if they will be using the car frequently.
If you’re adding a friend to your insurance policy, it is fair to ask them to contribute to the monthly bill. Car insurance is an essential part of driving, so it is not unreasonable that all drivers contribute.

Know Your Friend’s Driving History

Make sure that your friend is properly licensed and doesn’t have a history of car accidents or a DUI. A poor driving record is more likely to affect your insurance rates.
Additionally, if your friend is known not to be a good driver, you probably don’t want to lend them your vehicle. A dispute over a car accident could be detrimental to your relationship, but they should be able to get over not being allowed to borrow your car.

Check to See if Your Friend Has Insurance

The ideal situation is that your friend has their own car insurance. While your friend’s insurance might not cover the initial costs of an accident, it will kick in to cover larger amounts of damage if something serious happens.

Talk to Your Friend About the Implications of Getting into an Accident

Have an open discussion with your friend about what would happen if they get into an accident while driving your vehicle. There is no way to predict if an accident will happen, so it is a good idea to have a serious talk about the possible implications. Your friend should respect the situation and work with you to come up with a plan of action for the worst-case scenario.
A clear understanding between both parties will help settle any disputes down the road. Your friendship is important, so discussing things ahead of time can make everything easier.

Establish Boundaries

If you do allow your friend to borrow your car, limit the possibility of them getting in an accident by establishing boundaries. Agree on when and where they can drive the vehicle and be explicit about your expectations. If your friend has a tendency to drive after a couple of drinks, be clear that this situation wouldn’t be okay with you.
Allowing a friend to drive your car can create some tough conversations between you and your friend, and between you and your insurance provider if something happens. Always be honest with your insurance agent to make sure your coverage will be there when you need it.

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