Think twice when lending a car

If you’re the parent of a teenager, you probably feel like you wrote the book on rules around borrowing a car. Plus, you know you have to have your kids on your policy as an occasional teenage driver.

But what about when a friend or neighbour asks about borrowing a car from you? Does your auto insurance cover them? What if they have an accident – even one that isn’t their fault?

When it comes to lending a car to somebody there are two questions to think about:

• Can I lend my car?
• Should I lend my car?
• Can I lend my car to a friend, family member or another individual if they aren’t named on my car insurance policy?

Yes, you can, and the driver will be covered by your insurance. When you’re lending a car to somebody, they don’t have to be named on your auto insurance policy if the following criteria are met:

You have given consent for them to use your car.

They are licensed and are legally allowed to drive in Ontario.

They aren’t borrowing your car on a routine basis.

What’s a routine basis? Well, if they are borrowing your car to drive to the laundromat every Saturday, they should be named on your car insurance policy as a routine driver.

You are also responsible for making sure the person who is borrowing a car from you isn’t an impaired driver. If they have an accident while impaired, your car insurance policy won’t cover it, and you could be held liable for damage and injuries.

Should I lend my car?

Even if you’ve decided that you could lend your car, you still have to decide if you should lend it. If there’s an accident involving your car when you’ve loaned it, the incident goes against your vehicle insurance policy. It could mean a claim. Depending on the circumstances, it could mean a rise in your premiums.

So when you’re asked about borrowing a car, think twice and consider whether you’ll also trust the borrower with your car insurance record.