Lending your car to someone else doesn’t seem problematic until the borrower crashes it, uses it for delivery work or turns out to be excluded from the policy. The owner’s policy and how you use your vehicle matter as much as permission.
What Happens When You Lend Someone Your Car?
Ontario auto policies are written to respond to accidents involving the vehicle. If someone else was driving the vehicle with your permission, their insurance would not necessarily be the one involved. Your policy would most likely be considered primary insurance for any claims.
The borrower’s own policy may also be relevant if it includes OPCF 27 coverage for vehicles they do not own.
What If They Get Into An Accident?
If a collision occurs while someone is driving your vehicle, all parties involved should follow the same basic steps. Collect and record as much information from the scene as you can, including names, driver’s licence information and insurance information. Follow any rules about collision reporting centres or police reports, and contact the vehicle owner’s insurer as soon as possible.
Insurance adjusters will probably try to establish a few things after someone else was driving your car in a collision, including:
- Whether the driver had your permission to drive your vehicle
- Whether the driver held a valid licence at the time of the collision
- The insurance coverage under your policy
- Whether the driver was using your car for a purpose allowed by your insurance
- Who was at fault for the accident
A one-time permitted loan isn’t the same as regular household access, delivery use or renting the vehicle to someone. Disclose regular drivers and changes in use before a loss and ask whether an excluded-driver endorsement applies. Permission alone can’t override an invalid licence, excluded driver or prohibited use.
Read More: Getting Insured As An Occasional Driver
Who Pays For My Increased Premium?
Claims may show up on your policy even if someone else was driving your vehicle. If you’re unsure whose insurance is expected to pay a claim, speak with your insurance broker. Insurance companies follow approved rating rules when adjusting premiums at renewal.
Before lending someone your car, discuss how their driving could affect your premium.
What If They Get Into Trouble With The Police While Driving My Car?
Driving convictions generally follow the driver. Parking tickets, red-light-camera tickets and automated-speed-enforcement penalties are generally issued to the vehicle owner.
Speak with a lawyer if you receive a ticket when someone else was driving your car.
Can My Permission To Drive Override Exclusions From Coverage?
You can lend your Ontario-insured car to someone else when the driver has a valid driver’s licence. Make sure they have your permission to use your car and are using it in ways permitted by your auto insurance.
Coverage may be limited or denied when:
- The driver was using your car in a way that isn’t allowed by your auto insurance
- The driver was prohibited or excluded from coverage
- The driver didn’t hold a valid licence at the time of an accident
Certain accident benefits may still apply. There may be more information about permitted uses, exclusions and prohibitions in the policy. Check with your insurance broker if you’re unsure.
Let Your Insurer Know
It’s a good idea to let your insurer know when other drivers will use your vehicle regularly. This may include family or household members, a friend or neighbour, students or caregivers. Discuss this before they drive your vehicle.
Vehicle owners should ask their insurer how drivers are listed on the policy rather than assuming they’ll be considered an occasional driver. Confirm the driver’s status in writing, along with any exclusions such as an OPCF 28A endorsement.
Read More: Am I Insured If I Drive Someone Else’s Car?