Accidents happen, and sometimes they affect us even when we have nothing to do with them—like a case of “my friend crashed my car.” In a scenario like this, there are legal and financial repercussions. Dealing with the legal aspect requires legal expertise, but we’re going to tell you what happens in the financial aspect.
What to do depends on the situation, the amount of damage done, who caused the damage, and your car insurance policy. If your friend is responsible for the crash and you don’t have insurance, then you take on a significant liability and have to pay out-of-pocket for damages. Car insurance follows the vehicle, so if you have insurance, then you have some options.
Depending on the type of coverage purchased, some people fall under the category of permissive users—these are usually members of your household and any other person listed by name on your policy. If your friend is a permissive user, then your insurance usually covers the damages. By how much depends on the situation. There are some scenarios for when a permissive user crashes your car.
If the permissive user crashes your car and sustains heavy damage then your insurance covers the damage. If your friend causes damage to other people, either bodily or property, then you’ll have to cover that. If you have liability insurance, then your insurance covers that, if not, you’ll be held personally liable. If the damage caused is above your coverage, then you’ll have to pay the balance out-of-pocket. However, if your friend is insured, then his policy covers the balance. This is known as pro-rata.
If the permissive use causes minimal damage, then your insurance covers the damage.
If your friend is uninsured, the situation can be a little more complicated.
If an uninsured friend causes heavy bodily and property damage, then you will be held liable for damages. If the damage is above your coverage, then you will have to pay for the deductible—avoid letting an uninsured friend drive your car.
If your friend does not have a license you should not let them near the driver’s seat. Many insurance companies will refuse to provide coverage if the friend who crashed your car does not have a license. You will also be held legally responsible for any damage caused. Allowing an unlicensed friend to drive your car could lead to heavy financial and legal consequences.
What If You Have Pip Insurance?
Personal injury protection kicks in only when the driver of the car is hurt. Personal injury insurance is a no-fault policy that follows the driver first, then the car. This means that if your friend has a Pip and is hurt in the crash, then his insurance company covers his medical bills. If he/she does not have pip insurance, then he can claim against yours.
If a non-permitted or excluded user drives your car and sustains damage, your insurance company will not cover the cost. If you can prove that the friend took your car without your permission, then you will not be held personally liable, although, if you have collision insurance, then it covers all damage to your car if the accident was a collision. You would, however, have to report the unauthorized use to the police if you do not want claims to be made against your policy. If you gave your excluded friend permission or you fail to prove that the car was taken without your person, you will be held personally liable.
Your friend may not always be responsible for crashes. If your friend is involved in a crash that is perpetuated by another driver, then the other driver covers damages.
That pretty much covers all the major scenarios for your friend crashing your car. If your uninsured friend causes a crash with your vehicle and the damage to others is above your coverage, then you may have to sell your car (if the car sustained only minimal damage). If you choose to go this route, you can easily get that done using Car4us, it’s as easy as running a sell my car search online. This can be avoided by being cautious of who you allow to drive your car and getting appropriate insurance. You can compare car insurance quotes with iSelect and pick the best one for value.