To lend, or not to lend: what are the implications of lending out my vehicle?

Lending your car to a friend or family member is a risky thing to do, as you are also lending your insurance policy and any good driving record you may have established.  It is a common misconception that insurance follows the driver and not the vehicle, when this is not usually the case.

If you lend your car to a friend and they are involved in a collision that is their fault, it will be your auto policy that responds to any claims for damages caused by their negligence, and it may end up costing you.  The cost could be a deductible payment for vehicle repair or an increase in your premiums, but there are also more serious implications for you to consider.  If the borrower breaches a condition of the policy (e.g. driving without a valid licence), or commits a criminal offence while driving your vehicle (e.g. impaired driving), your insurance company may deny coverage and you could end up being personally responsible for any damages and injuries resulting from that collision. This is a very serious financial risk, so be sure to ask questions and think carefully before handing over your keys.