Your hanging out at your place and a Roommate asks if they can borrow your car to run an errand, or your Cousin is visiting from out of town and needs to drive downtown for a job interview, and you let them borrow the car! In both these cases you want to consider what the long term consequences might be to you , your wallet, and your relationship with your friend or cousin. Sure its the nice thing to do, but it might end up costing you and your friendship a lot!
Some carriers have what is called a “Named Driver” policy. That means only the Drivers named on the policy are covered. Anyone else driving that car has no coverage from your policy. If your policy does include “permissive use” they may be covered up to the policy limit, or they might be covered only to the state minimum, Because your coverage is primary in “Permissive use” cases, it is your policy which will pay for your car repairs if the driver is negligent. That means you might also be responsible for the deductible (if they can’t pay it) , and in some cases it could get rated up for the next three years (Insurance companies usually “rate up” policies that have claims on them)! This could get very expensive, and you weren’t even driving the car!
Before you throw someone your car keys make sure you have read the policy, and know what exposure you have if they get into an accident. A simple act of kindness and trust could be a very expensive lesson for you.
