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Loaning or Renting Your Auto

I’d have to say, on average, people are nice.  Most of us would willingly help someone we didn’t know who needed a hand because it’s hard for a lot of us to say “no.”

We’re more likely to say “no problem.”  Even when it comes to letting someone borrow our auto. If the person borrowing your auto doesn’t get into an accident, there won’t be a problem… unless they don’t put gas back in the car! I’ve heard people shrug off the risk they take on by loaning their auto to someone by saying, “Well, I’m sure he’s got insurance.” Time out: his insurance isn’t going to protect you or pay for your damaged vehicle. And, if you loan your auto to someone who doesn’t have their own auto policy, your auto insurance is not going to protect them.

A quick look at this situation: If your new friend crashes your auto, then (1) both you as the vehicle owner and your friend as the negligent driver could be sued if the accident resulted in injury or death to someone else or damage to another person’s property. Your car insurance’ lawsuit protection will likely cover you up to the limit of coverage you selected on your policy; (2) if you have physical damage coverage on your auto policy, it would likely address damage to your auto; (3) your policy’s Personal Injury Protection (PIP) won’t cover your new friend’s auto accident medical costs; (4) finally, the accident will be on your “record” in the big insurance database in the sky.

One last note: if you decide to play “Hertz” and rent your auto to someone, much of your auto policy’s coverage shuts off.

If you loan or rent your auto to someone, you’re taking a risk. If someone with no auto insurance is driving your auto, they are also taking a risk. Call your insurance agent to walk through this situation and become an informed risk taker!