Every so often a pal asks to borrow your cable car, and you lend it. always stop to think about who would pay if he got into an accident ? The short circuit answer : You would. “ When you lend person your car, you lend them your policy, ” says Lynne McChristian, a spokeswoman for the Insurance Information Institute. cable car insurance follows the vehicle, not the driver. Although your friend ’ randomness car policy might kick in finally, your policy is primary — and filing a claim could cause your rate to go up. Before you decide to let person use your wheels, consider what it could do to your finances.

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Friends causing car accidents

by and large speaking, your car insurance policy applies to all drivers in your family — spouse, partner, roommates or relatives — who have license to use your car. Non-household members are normally considered “ permissive ” drivers. Suppose you lend the car to a supporter, who causes an accident. Your liability policy would pay to repair damage to the other vehicle and any medical bills, improving to your policy limits. once those limits are reached, your ally would be creditworthy for what ’ s left over. still, the incident goes down as a liability claim against you and could cause your rate to go up at reclamation time. If your ally doesn ’ thymine have car insurance, then he could be sued for whatever your policy doesn ’ triiodothyronine top. You might be sued besides, since your car was involved. According to Jury Verdict Research, the medial jury award for vehicular indebtedness was $ 34,877 in 2013, the most recent year for which data was available.

then there ’ s the damage to your own car. For that, you ’ ll need to tap your own collision coverage — if you have it — and that will be another claim on your record that could lead to a rate increase. If you don ’ t have collision coverage, you ’ ll have to find the money to pay for repairs.

Listing car borrowers on your policy

People who frequently borrow your car might not be covered — because a regular driver of your cable car should be listed on your policy. It ’ sulfur best to add frequent borrowers to your policy, such as roommates, to make certain your insurance will pay for accidents. Adding drivers can affect your rate. A younger person or person with a spotty drive record could cause your pace to go up, but adding an excellent driver could actually lower it. Insurers in eight states are allowed to reduce coverage limits for anyone — flush episodic borrowers — not specifically listed on your policy : California, Colorado, Michigan, Missouri, Ohio, Oklahoma, Pennsylvania and Washington. That means even if you have purchased a good total of liability insurance, coverage could be reduced to department of state car insurance minimums if your friend crashes. To avoid this, consider listing on your policy any non-household members who occasionally borrow your cable car. If friends don ’ t have their own indemnity, they could buy non-owner car indemnity. If they cause an accident in your car, your indebtedness policy would still be primary and their non-owner insurance would pick up any end. Non-owner insurance doesn ’ thyroxine include collision or comprehensive coverage, so you ’ d still have to use your own collision insurance for damage to your car.

Driving your car without permission

Suppose a ally or relative takes your car without permission and causes an accident. In that casing, his insurance could be primary and yours secondary. But if that person is uninsured, you and your policy will probable be creditworthy. Your insurance company will likely assume the relative or acquaintance had permission, unless you can make it clear that he didn ’ triiodothyronine. It can be hard to say no to person who asks to use your car. But before saying yes, decide whether you trust the borrower to drive safely, since a single accident could have a permanent impact on your finances. Looking for the right insurance policy ? NerdWallet ’ s comparison tool can help you find the cheapest car policy quotes.

Donna Freedman is a erstwhile conducive writer for NerdWallet. persona via iStock .

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