Despite the pre-existing trust in these relationships, when lending and/or borrowing someone else’s car, it is important to ask yourself the following questions, based on questions your car insurance broker could ask you:
- Who will be driving the vehicle? Is it a young driver, a driver with demerit points or a suspended licence?
- Does the driver have the required licence class?
- For what purpose will the vehicle be driven? Commercial, bus, pizza delivery…?
- Where are they going with the car? Quebec, Ontario, or the United States?
When you lend your vehicle, you are giving consent to the other driver to use it. Simply handing your keys over counts as oral consent!
In the case of an accident while someone else is driving your car, the following implications are important to consider:
- If the person whom you lent your car to is involved in an accident and is held accountable, your car insurance policy as well as your other affairs will be compromised: are you able to pay an elevated premium?
- If the damages are substantial, and your insurance policy does not cover the totality of it, you could be held personally liable for the remaining amount, as the vehicle belongs to you.
- Your insurance policy could be declared invalid in certain cases: if there are any material changes, because the use of the car by the third party will not have been the initial use that you declared to your insurer, and you may be held personally liable for the damages incurred.
On the other hand, if you regularly lend your car to your spouse or close relative, the latter become occasional drivers and should be mentioned in your insurance policy!