Do you lend your car to your friend, coworker, neighbor, or just anyone else? If you care about your auto insurance policy, you need to stop it right away. Any person who carries the vehicle and not a part of the original policy poses a serious risk. Doing so is a sure way ticket to convert your existing affordable insurance coverage into an expensive policy should the car gets into an accident.
There is no question about you being the safest driver on earth. However, can you assume that the person driving your car right now has the same qualities or road behaviors as you do? If the car gets into an accident and someone is injured, hurt or killed, prepare yourself to answer any liabilities and the probability that your insurer will not cover all the expenses incurred during the accident. Common sense would tell us that if this happens, you are left to pay for all the damages and legal expenses that may arise.
Why this is happening in the first place?
You are probably asking yourself, “Is this the way it should be?” Your insurance coverage is supposed to protect you from any accidents and then what you are doing right now is to pay for the expenses yourself. Had you known this before, I would assume you would not have spent your money on this insurance coverage. Before we resort to this kind of thinking, we first need to understand why insurance providers are treating the case this way.
Keep in mind that your insurance policy requires you to identify the drivers who are supposed to be covered by the said policy. Now, if the vehicle gets into an accident and the person who is driving the vehicle is one of those who are in the declaration sheet, the insurance coverage will take effect. On the other hand, if the driver is not listed in the declaration sheet, there is now a breach of contract wherein your insurer can legally get away or deny your insurance claims. It is almost impossible to win this case should you decide to go to court. Keep in mind that unauthorized drivers should not be allowed to carry the vehicle, unless, you are looking for a headache.
During the time you purchased your insurance coverage, you were asked to provide all the license numbers of all the persons in your household including your spouse and children who might drive the vehicle. Sometimes having teen drivers at home will have a major impact on the cost of your policy because they are considered as high-risk drivers. As you can see, all the potential drivers as well as their risk levels will help shape up your premium rates. If you lend your vehicle to a friend or relative, obviously, the person’s risk level is not determined.
What are the consequences for such actions?
First, it is possible that your insurer will refuse to pay for any damages incurred during an accident if the driver is not listed on the declaration sheet. If someone is killed or injured on the said accident, you will likely end up being sued in the court instead of your friend.
Now, there is nothing wrong if you are generous to your friend or relative. The best way to remedy this situation is to contact your insurance agent and ask for a rider policy for that particular driver. Keep in mind that, even if you have full insurance coverage, this is still not enough and certainly not the solution we are looking for.
