“If I lend my car to a friend and they get in an accident, then their personal auto policy will cover all the damages.” This is a common myth about auto insurance. In most states, including NJ and PA, the auto policy covering the vehicle; in this example, your vehicle; will be the one to cover the damage done to any third party and your own vehicle. The only thing covered by your friend’s policy in this scenario, will be his/her own personal medical expenses.
Do You Need to Pay Your Deductible?
Unfortunately, should your friend damage your car while it is under his/her control, your automobile insurance company will be paying to repair your car and could potentially be required to pay for damages to other vehicles and individuals, too. The insurance follows the vehicle rather than the insured driver. That means, at a minimum, you’ll need to pay your deductible to repair the damage to your car. Plus, your insurance costs may increase at renewal due to lost credits such as the accident-free credit. Finally, depending on the situation and amount of coverage, you might be required to pay additional costs for damage incurred to another person or their vehicle.
Know Your Risks
Lending your car to a friend can be a big help at a time in need. However, it may lead to more costs than you expect. Knowing your risks could cause you to change your decision. At Rue, we can’t tell you whether it’s better to help your friend or protect your auto insurance rates, but we will expel the myths to help you make the right decision for you.
Remember, in every state, these laws and policies may vary, so it is important to discuss these situations with a licensed agent. That’s why at Rue Insurance, our licensed agents are available to speak with you one-on-one, to develop a customized insurance plan that fits your unique needs. Contact us today and learn more about how to Be Ready with Rue at 609-586-7474 or on our website here: https://www.rueinsurance.com/contact/.