How to React If a Friend Crashes Your Car

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  • What to do?
  • Permissive driver
  • Insurance application
  • Examples
  • Increasing rates
  • Final tips
Car insurance tends to follow the car, not the driver. This means that regardless of whether you or your friend caused the accident, your car insurance policy will be considered primary—and your rate will likely go up.
But it’s not all bad. Even if you have an accident on your record, a car insurance comparison app like Jerry can help you find the best rates. It’s fast, easy, and you could save hundreds each year simply by switching to a new company after the accident.
If you find yourself in this awkward situation, here’s what you need to do.
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What to do if your friend crashes your car

If the accident just happened, ask your friend to collect the necessary information. At minimum, they’ll need insurance information for the other driver and a license plate number.
It’s also a good idea to take photos to document the scene.
It can be frustrating—and expensive—to deal with a car accident that you didn’t cause, but do your best to keep a level head and preserve the friendship. Check to see if your friend is okay and set a time in the near future to meet with them and discuss the situation.
Now, there are a few things you should know about what happens after a car accident involving your vehicle and a friend who was driving.

What is a “permissive driver”?

A permissive driver is someone you allow to use your vehicle, but who isn’t listed on your policy.
There’s nothing wrong with letting people borrow your car occasionally. This is called permissive use. If you give someone permission to use your car, it’s considered permissive use whether you’re in the car with them or not.
But in a permissive use accident, your insurance policy is considered the primary insurance. It will be exhausted before any other policy comes into play—even if your friend has their own insurance policy.
It’s worth pointing out that if someone is driving your car regularly (defined as more than 12 times per year), they should be formally added to your car insurance policy. This can bring up your premium but it’s the legal thing to do to ensure coverage.
Keep in mind that there is also something called a “named driver policy,” which is rare but real. It only covers the people listed on your policy. In this situation, if someone is driving your car and they’re not named, your accident will not be covered.
In some states, it’s legal for a company to lower your coverage levels for an accident payout if an occasional driver was behind the wheel instead of a primary driver listed on the policy. Here’s where that can happen:
  • California
  • Colorado
  • Michigan
  • Missouri
  • Ohio
  • Oklahoma
  • Pennsylvania
  • Washington
If you live in one of these states, the company can drop your coverage level to state minimums if a non-primary driver was at the wheel in an accident—even if you have a robust policy with tons of liability coverage.
Key Takeaway If you’ve allowed a friend to drive your car this is considered permissive use, and you (and your insurance policy) will usually be responsible for damages if they get into an accident.

How will my insurance be discharged?

If a friend crashes your car, your collision insurance will pay for damages to the vehicle up to your policy limit. But collision coverage is optional, so it’s possible that you may not have this type of protection.
Your liability coverage will pay for any damage your friend did to the other person’s vehicle, or for injuries to someone else.
Keep in mind that you only get protection up to your limits. In a serious accident, damages could very well be higher than your own limits.
There are several ways this could play out. It’s possible that both your insurance and your friend’s insurance could be activated.
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Example 1: Your friend crashed your car, but it’s minor damage to your vehicle only

If your friend gets into an accident and only your car sustains minor damage, the claim will be filed against your policy under the collision portion.
This means that you will pay the deductible noted in your policy and your insurer will cover additional repair costs up to your limit. You can always ask your friend to pay the deductible.
Collision coverage is never required, so you may not have it. In that case, you will have to pay for the repairs out of pocket. Hopefully, your friend offers to help!
In this situation, your insurance rates will likely increase—even if your friend was the one driving.
If your car is undrivable for a few days while getting repaired, you may need a rental. Rental reimbursement coverage will pay for this cost if you have it on your policy. Otherwise, you’ll need to pay it out of pocket.
Key takeaway If the accident is minor and only your vehicle is slightly damaged, your collision insurance would kick in to cover the costs.

Example 2: Your insured friend crashed your car and caused a major accident with lots of damage

Let’s imagine a situation where your friend caused an accident that resulted in major property damage and bodily injury to others. The first type of coverage that comes into play is your own liability policy.
Liability has two parts: bodily injury and property damage.
Liability coverage follows the car first and the driver second. So, the car owner’s policy (yours) will cover the driver and the other vehicle’s passengers for bodily injury. The policy of the car owner (you) also covers property damage caused by your vehicle. It usually covers legal fees up to your limit if you get sued, too.
Here’s how your insurance might be discharged.
You probably have liability coverage, since it’s required in almost all states. But state minimums vary widely. If you only have the state minimum, you could be in trouble.
In Arizona, for example, it’s as low as $15,000 bodily injury per person and $30,000 bodily injury per accident. You can imagine how quickly that amount would be gobbled up by medical fees and legal bills.
To avoid this situation, a good strategy for liability coverage is to go high.
A good ratio is 100/300/100, which is per person, per accident, property damage. Having coverage isn’t much good if it doesn’t fully cover you in an accident, right?
The amount you’ll end up paying for increased coverage on your premium won’t be too much more, but it’s definitely worth the protection.
Why would you do this if it costs you more and you may not need it?
If you don’t have enough coverage but your friend causes a serious accident, the court is allowed to seize your possessions (including your home) and future income to recover damages and pay outstanding bills.
Another possibility is that your friend’s coverage could kick in.
If your own coverage isn’t enough to pay for damages, your friend’s policy will be considered secondary coverage. Yours will be exhausted first, then your friend’s. This is called “pro rata” and it’s a way of sharing costs.
If your friend was injured but has personal injury protection, they can claim against their own policy because PIP follows driver first and car second. If your friend doesn’t have coverage but you do, then they could claim against your PIP insurance to get the necessary care.
Key Takeaway If the accident caused lots of damage, it’s possible that both your insurance and your friend’s insurance could kick in to cover the costs.

Example 3: Your friend crashed your car, did a ton of damage, AND they didn’t have insurance

This is a particularly bad situation. If the damages exceed your coverage level, then you are personally on the hook to pay for all remaining expenses related to medical fees, property damage, and legal bills.
Don’t let an uninsured person drive your car. All the damage will fall to you and your rates will go up. The court could seize assets to pay for costs, including your retirement accounts and savings accounts.
If you know someone who is uninsured but still needs to drive, it’s best to recommend that they purchase a non-owner policy before loaning them your car.

Example 4: Your friend crashed your car and they were unlicensed

Most companies and policies exclude coverage for unlicensed drivers. If your friend is unlicensed and they cause an accident while driving your vehicle, you are legally responsible for all costs.
Car owners have vicarious responsibility for anyone they permit to drive their car. So if you allow someone to drive your car, you’re liable. And if your friend doesn’t have a license, they probably don’t have insurance.

Example 5: Your friend drives your car without permission and gets into an accident

In this case, there’s good news—at least for you. Since this wasn’t permissive use, you won’t be held accountable for costs.
If your friend has insurance, their policy will kick in first to cover damages. If your friend was uninsured, then you may need to use your own collision insurance to cover repair costs for your vehicle. Your liability coverage may be used to cover damage to someone else’s property.
Most insurance companies will assume that a friend had permission to drive your car unless there are clear signifiers that you didn’t give it. An example is if a friend sped away in your car after drinking and you didn’t give authorization. You may need to file a police report to corroborate unauthorized use for your insurer.
If someone you know uses your vehicle without permission, this is called “unauthorized use.” If you don’t know the person who drove your vehicle, it’s called theft—and this is treated differently by insurers.
Key Takeaway If your friend was unlicensed or uninsured, they’ll have minimal protection in the event of an accident.

Other examples of someone else crashing your car

Your car is stolen and then gets into an accident

If your car is stolen, you won’t be held responsible for damage to people and property if you report the theft to your insurance company (and the police). But you’ll need to use comprehensive insurance to cover any damage to your own vehicle. Even if the thief had their own car insurance, their policy won’t cover anything related to the accident.

An excluded driver crashes your car

If you have a named policy, all excluded drivers will have zero coverage in an accident—even if you give them permission to drive your car. This includes teenaged children, new drivers, and older adults living in the home with you.
Consider them like the friend in the first example above. You will be on the hook for covering damages, your insurance policy will be activated, and your insurance rates will go up.

Will my insurance rates increase?

Your insurance premium will almost certainly increase after an accident. The rate increase could be a few dollars a month or more than a 50% bump—it depends on the circumstances of the accident and your previous claims history.
The higher rate is likely to remain for about three years until you can prove you are a safe driver again.
Accident forgiveness means you might be able to get away scot-free. It’s an optional add-on policy that you purchase at the beginning of your policy period and it’s usually only available to those with a clean driving record.
In some cases, accident forgiveness is extended to long-time customers who have clean driving records. Either way, be sure to ask your insurance company about it.

Final tips

Don’t hand your keys over to just anyone. If your friend crashes your car, you could face legal problems, financial difficulties, and increased monthly insurance bills.
If your rates are set to go up after an accident, there is still hope!
Keep your car insurance payments low by shopping around. Jerry compares multiple car insurance quotes online to find you the absolute best deal given your driving history. It’s free, fast, and the average Jerry user saves $879 per year.
If you’ve been loaning your car to a friend who is struggling to find affordable car insurance, recommend that they download Jerry. By helping your friend find an affordable policy, you’re protecting them (and you) from sticky situations in the future.
“After an accident, my policy was set to go up to $404 a month. I was almost ready to park my car and just start riding my bike! But Jerry went above and beyond to find me the best rate, and they ended up saving me over $200 per month.” — Satisfied Jerry User
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