Car Borrowing Series: How To Loan Out Your Car Carefree

Posted in Auto Insurance

August 21st, 2009

Most of the time when there is a friend or family member in need, you’re willing to help. However, there are some favors that should be reconsidered such as loaning a vehicle. Before handing over the keys, it is imperative that the owner of the car check with their car insurance company to make sure they are properly covering themselves in case a collision should occur.

When selecting auto insurance, the car owner has permission to add anyone under their coverage for the term of the coverage. So if you know your baby sister is going to be moving in with you and your husband for a spell, call your insurance provider and talk to them directly about the situation – adding her to the policy may be the best thing if she will be borrowing your vehicle regularly.

However, if someone wants to use your vehicle for just a day or two, you need to ask them directly whether or not they have their own car insurance. If they do chances are you can loan your car safely as it is standard that in that scenario yourauto insurance policy will cover your vehicle, plus you, your relatives and anyone else you give permission to use your car.

However, if they do not have car insurance coverage, you truly better think twice about what they are asking and check the laws of your state regarding insurance coverage when loaning your car. Like with every type of insurance out there, it is entirely up to the state to dictate the rules regarding coverage so just because loaning your car may be fine in Wisconsin, it may not be smart to do in New Jersey.