Whose Auto Insurance Will Pay For An Accident in a Borrowed Vehicle?

Posted on behalf of Peter T. Nicholl in Car Accidents Published on June 18, 2020 and updated on March 7, 2022.

being handed keysA car owner may often let a friend or relative borrow his or her vehicle without considering whose insurance will pay for damages in the event of an accident. This is why it is so important to know if the person borrowing your car is a safe and responsible driver. If not, it could impact your auto insurance.

In these situations, we encourage that you get in touch with an experienced lawyer as soon as possible. Our legal team at The Law Offices of Peter T. Nicholl explain who may be liable for damages in a car accident if someone borrows your vehicle and how to handle an insurance company who refuses to pay. Learn about your potential legal options in a no-cost consultation with no obligation to hire us.

Liability for Damages in a Car Accident

Generally speaking, when you let a friend or relative borrow your car and he or she is involved in an accident, your insurance company would be primarily responsible for covering any damages. The crash could also result in higher insurance premiums. This is because auto insurance is attached to the vehicle, not the driver. Many car owners are unaware of this until an accident happens.

Determining liability is also impacted by whether or not you gave permission to borrow your vehicle. If someone took your car without asking, your insurance company may not be responsible for damages. A Maryland car accident lawyer from our firm is prepared to provide insight on this in a free case review.

Negligent Entrustment in Maryland

If you gave permission to a friend or relative to borrow your vehicle knowing he or she is not a safe and responsible driver, this could be deemed negligent entrustment. This means that you acted negligently by letting someone borrow your car who was likely to use the vehicle in a way that could cause harm to others. A reasonable car owner would have acted differently.

A few examples of negligent entrustment include:

  • The borrower has a history of car accidents or reckless driving
  • The borrower is underage
  • The borrower has a revoked or suspended license
  • The borrower was under the influence of drugs or alcohol

Does Auto Insurance Cover Accidents in a Borrowed Vehicle?

When someone else who was borrowing your vehicle is injured in a crash, the primary liability coverage would come from your insurance policy, up to the policy limits. If this is not enough to cover the damages sustained, the driver’s liability insurance coverage would help cover the rest.

For instance, if the car owner has $30,000 in bodily injury liability, but the injured person’s damages are $50,000, the driver’s liability insurance would cover the remaining $20,000.

In Maryland, the minimum auto insurance coverage is as follows:

  • $30,000 for bodily injury liability coverage per person
  • $60,000 for bodily injury liability coverage per accident
  • $15,000 for property damage

This coverage could help cover medical costs and other damages suffered by drivers and passengers.

What if the Insurer Refuses to Pay Damages?

An insurance company could refuse to pay for damages in an accident if someone else was borrowing your car. Insurers may claim the following to avoid making a payout:

  • The borrower took your vehicle without permission
  • The borrower was driving while intoxicated
  • The borrower is not included as a guest driver on your insurance policy

It is important to know the tactics insurance companies use on a daily basis. If you need assistance, we recommend seeking legal representation.

Get in Touch With An Experienced Lawyer

If you let a friend or relative borrow your car and he or she was involved in an accident, it can become a significant insurance and liability issue. Our lawyers are available anytime, day or night, over the phone or online to speak with you about your situation and discuss the legal options that may apply to you.

An initial consultation with us is free of charge. You are not obligated to retain our services. Should we represent you, we charge no upfront fees. You only pay us at the end if you obtain compensation.

Get the legal help you need by calling 410-244-7005.