When a friend crashes your car, whose insurance pays?

When a friend crashes your car, whose insurance pays?

It is not uncommon for someone to lend a car to a friend. I mean that's what friends are for, right? Unfortunately, sometimes the friend inadvertently causes an at fault accident. While the accident also may need to be reported to the insurer of the friend in order for the friend to obtain excess coverage, if needed, your own insurance policy will provide coverage for the friend on a primary basis.

Primary insurance follows the owner of the vehicle, and anyone having permission to operate the auto is considered an insured under the owner’s policy. According to the ISO personal auto policy, under Part A—Liability Coverage, it states:

“B. "Insured" as used in this Part means:

  1. You or any "family member" for the ownership, maintenance or use of any auto or "trailer."
  2. Any person using "your covered auto."
  3. For "your covered auto,” any person or organization but only with respect to legal responsibility for acts or omissions of a person for who coverage is afforded under this Part.

So, in essence, your the friend would be considered a permissive user of “your covered auto” and, therefore, afforded primary coverage under your personal auto policy.

Nick Ruickoldt's Article in the Insurance Journal

Nick Ruickoldt's Article in the Insurance Journal

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