“My Friend Borrowed My Car and Crashed It, Now What?”

Few of us think twice about lending our cars to family or friends. We tend not to consider the possibility that an accident could occur when someone else is driving our car.

Provided the borrower is licensed and legally allowed to drive where the car is insured, there is nothing in our insurance contract that requires us to name the borrower on our insurance policy. This changes if the borrower is using the car on a regular basis. For example, a family member or friend who borrows the car to drive their children to a weekly hockey practice should be named as an occasional driver.

An owner of a car owes a duty to make sure that it is operated safely regardless of who is behind the wheel. This duty is codified at section 192(2) of the Highway Traffic Act. An owner of a car is liable for any loss or damage caused to any person by reason of the negligent operation of their vehicle. This means that if you lend your car to someone who rear-ends another car and causes the occupants of either car to suffer serious injuries, you will be named as a defendant in a lawsuit for damages. However, if the car was stolen or otherwise being operated without the owner’s consent, there is no liability on the owner.

Ensuring that our cars are adequately insured is the best way to achieve peace of mind when lending (or driving) a vehicle. It is surprising how many car owners still have insurance policies that provide only $1 million in liability protection when it costs only a few dollars more to increase our limits to $2 million. A car owner with only a $1 million insurance policy risks personal exposure to having his or her assets seized if their car causes an accident resulting in serious injury.

When you lend your car you are also lending your insurance. For this reason it is important to make sure you are adequately protected before you lend your car to your family or friends.

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