Thinking of lending someone your car? Here are the risks
Lending your vehicle to someone who needs it is a nice thing to do. But it could have serious consequences for your insurance record.
In Ontario, the owner of an auto insurance policy can be held “vicariously liable” for an accident that happened when someone else was driving their car.
“It is vital for any owner to understand that any claims for damages from an accident involving your vehicle will be made against your insurance policy and the owner is responsible for any driver’s negligence,” says Rajiv Haté, a personal injury lawyer in Mississauga, Ont.
“It does not matter if the owner is not driving the vehicle, both the owner and the driver can be sued.”
A high-profile accident in Ontario highlights the risks of lending out your vehicle.
A man who rented a car, but was not driving it when an unnamed third party dragged an OPP officer for more than 100-meters after a traffic stop went awry, is now named in a $4-million lawsuit filed by the officer.
The grey Chrysler 300 with Quebec license plates was being driven by someone other than Ian Anthony Green, the signee in the rental contract.
Also named in the suit is one John Doe — the still unidentified driver — as well as Enterprise Rent-A-Car Canada and Aviva Insurance Company of Canada.
Initially, police laid a number of criminal charges against Green, but those were later dropped since he was not in the vehicle at the time. But that doesn’t mean someone in this scenario can’t still be found liable in civil court.
To make sure you’re being responsible when you let someone else drive your car, Haté and the Insurance Bureau of Canada recommend first considering these four questions:
Are you confident the person borrowing your vehicle is a responsible and skilled driver? Any accidents or offences that happen while they’re behind the wheel will still affect your policy and premiums.
Does this person regularly borrow your car? If someone regularly borrows your car but isn’t listed on your policy, they may be denied accident benefits, so it might be a good idea to add them to your policy.
Does your insurance policy have any limitations around the age of the person borrowing your vehicle? For instance, some policies won’t allow anyone under the age of 21 or 25, to drive your vehicle. Even just keeping the car keys in an easy-to-access spot within your home could imply you’re giving consent to young drivers in the family to use the vehicle.
Does the person you’re lending to have a valid driver’s licence that has not been suspended?
“It may be a little embarrassing to ask your neighbour or your cousin about the validity of their driver’s licence or their driving record,” says Haté, “but it’s your right and responsibility under your own insurance.”