Who's Liable in an Accident When You Lend Your Car?

#AskCoreySax

When a friend or relative asks to borrow your car, the simple act of handing over the keys could unleash a Pandora’s Box of legal issues in the event of an accident. It’s difficult to say “no,” but before handing over the keys, you should consider what your act of kindness might cost you and what questions you should ask the other person to protect yourself.

Your insurance goes along with your car

When someone borrows your car and has an accident, any claims for damages by other parties are made against your insurance policy. The accident goes against your record and could lead to higher auto insurance premiums.

There are circumstances under which your insurance company can refuse to pay a claim when you lend your vehicle to someone. This could occur in the following situations:

• The accident was caused by the person who borrowed your car driving under the influence of drugs or alcohol
• The person driving your vehicle was excluded from driving it under the terms of your Ontario insurance policy
• You lent your vehicle to someone with a suspended driver’s licence

If your insurance company refuses to pay the claim because you violated the terms of its policy, you could be liable for the damages caused by your friend or relative.

Another reason to ask to see your friend’s driver’s licence

There is an added incentive to make certain the person borrowing your car has a valid driver’s licence. Ontario has a Vehicle Impoundment Program designed to get drivers with suspended licences off the streets. You can check the validity of a licence before letting someone borrow your car by using an online service offered through the Ontario Ministry of Transportation.

Under the program, your vehicle will be impounded and held for 45 days if the licence of the person driving it was suspended for one of the following Criminal Code violations:

• Driving while impaired
• Driving while disqualified
• Leaving a crash scene

If the driver of your vehicle had a licence suspended for a violation of the Highway Traffic Act, your vehicle will be impounded for seven days. Getting your vehicle back at the end of the impound period requires payment of towing and storage fees.

Lending your car to someone living in your household

When applying for auto insurance in Ontario, you must disclose the names of anyone living in your household who might drive the insured vehicle. The driving record of that individual could affect the premiums the insurance company charges you for the policy. Failure to disclose this information could give the company grounds for refusing to pay the claim, which means it would become your responsibility.

Protecting yourself when borrowing a vehicle

An owner is not the only one who must be concerned about liability in the event of an accident when someone borrowers a vehicle. If you borrow your friend’s vehicle, you should ask to see proof that it is properly insured. Proof of insurance includes the effective dates of the policy, so you should make certain it is valid on the date you expect to be driving.

In the event of an accident, the insurance on the vehicle will pay any claims. Keep in mind that insurance coverage is valid only if you have permission of the owner to use the vehicle.

When you are injured in an accident

Collisions involving borrowed vehicles can create complex legal issues. Thepersonal injury lawyers at Diamond & Diamondare available to help with claims for compensation.Our 24/7 injury hotline is available at 1-800-567-HURT or you can visit our website to speak to someone now about your claim. Consultations are free, and we have offices are located throughout Ontario.