You always want to be there for a friend or family member when he or she needs your help. That may even include letting a friend borrow your vehicle for an important interview or errand. However, you must be aware of the potential consequences which is why it is important to understand what happens if someone other than you crashes your car.
The first thing that comes to mind for Michigan drivers is the question of insurance coverage. For example, are you liable for the damages if your friend or family member was driving? Who pays for the damages and what will insurance cover? Will your auto policy be impacted or will the driver’s?
There is a wide range of scenarios for what can happen in this type of situation.
Insurance coverage
If someone borrows your car and wrecks it, they may be unwilling or unable to pay for the damages out of their pocket. You may still be covered by your own insurance policy in Michigan. Most insurance policies will cover for damages under two common insurance plans:
Liability insurance
This is mandatory in Michigan with recent changes being made to the coverage options based on the state’s new No-Fault law. Liability insurance covers any damages you (or in this case, the person driving your vehicle) caused to the other driver in the accident. Those damages can include medical costs related to injuries suffered by either party as a result. Liability coverage is unlikely to pay for damages beyond the limit for which you are insured.
Collision coverage
Collision coverage is optional and covers the costs to fix your damaged vehicles. Most policies require a deductible payment for any individual incident.
It is typical that your insurance company will cover a friend or family member who was driving your vehicle assuming they were given approval by you to use their vehicle. This is often referred to as a “permissive driver.” But there are exceptions that an experienced auto accident attorney can help you address.
If your insurance company has agreed to cover costs associated with your friend’s accident, it is important to remember that you will only be covered up to whatever limit your policy specifies, which is also true if you were the driver that caused an accident. For example, if there was $60,000 in medical and collision costs, but the insurance limit on your policy is just $50,000, then the remaining balance of $10,000 will ideally come from your friend’s insurance policy. If not, it will have to come out of someone’s pocket.
Here’s when your insurance policy will not cover costs if someone else driving your car gets into an accident
Non-valid driver’s license
Your insurance policy will not cover the cost and your friend could be held liable for the accident.
Driving under the influence
This is a potentially worst-case scenario. Most insurance policies provided to Michigan drivers will have an exclusion clause. Under Michigan’s Impaired Driving Law, drivers can be arrested at any blood alcohol level if they exhibit signs of impairment while operating a motor vehicle. If someone else crashes your car and was under the influence, you will likely have no coverage for any damages.
Permission was not given
Essentially if your friend or family member took your vehicle without your knowledge, you will not need to access your insurance. All the liability goes to him or her and their insurance policy will be impacted first. Of course, you will need to prove that permission was not granted which can be difficult.
Excluded driver
Insurance policies often provide Michigan drivers the option to explicitly exclude certain people from your plan. Those individuals can be specifically noted in your policy.
To summarize, if you are going to allow someone close to you to drive your vehicle, take the following steps:
- Confirm he or she has their own auto insurance, and whether they have collision coverage.
- Make sure you do not let them use your vehicle if they have a suspended license or are driving under the influence.
- Confirm with them that if an accident occurs to contact you immediately following any necessary connection with local law enforcement.
- Familiarize them with where any important items are in your car, such as an emergency car kit, spare tire, etc.
If you are informed that your friend or family member has been involved in an accident while driving your vehicle:
- Insist that they contact law enforcement and get a police report.
- Make sure you get the contact name and information of any other drivers impacted.
- Connect with your insurance company and be transparent about what occurred.
Can you be sued if a friend wrecks your car when driving it?
It is possible that you could be sued for financial restitution. This is most likely to happen if the accident is significant enough to cause a level of damage where the auto policies of both you and your friend have been exhausted.
For example, if you have $100,000 coverage on your policy and your friend has $50,000, the maximum amount that could be received from your combined insurance companies is $150,000. Many accidents, especially if severe injuries occur, may ultimately require damage costs that exceed this threshold. In that case, your personal assets may be pursued including your property, other working vehicles, even direct cash from your bank accounts.
There is also the potential that you could be sued if it were determined that you made negligent decisions in lending your vehicle out to that friend or family member. If he or she has vision issues, or a poor driving record that may include DUIs, or in any other way is determined to be unfit for driving at that time the accident occurred, you could be held liable for all damages.
The importance of getting scheduled maintenance done on your vehicle
Additionally, you could be liable for the costs associated with a car accident in Michigan if your vehicle is deemed unfit for the road at the time your friend or family member was driving it. It is important that your vehicle be maintained so that safety standards are not compromised. Any safety equipment failure on your vehicle could be an issue. If there were visible issues with the vehicle before the accident that could have impacted the performance and safety of the car, you may be in danger of getting sued.
The best way to prevent this is to have your vehicle go through an annual maintenance check-up.
Lawrence Kajy and the team at Kajy Law are experts in helping you or someone close to you that has been involved in an auto accident. We also can help you determine your strategy if you lent your vehicle to a friend or family member who ended up getting into an accident. Call Kajy Law today to set up your non-obligation appointment to better understand your options.