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Do not assume that your friend’s insurance will pay for any accident. If you have granted your friend the right to hold and use your car keys, then your own insurance should pay the bills that could result from any collision.
Why would your insurance pay the bills, and not your friends?
Companies that sell auto insurance look to the company that has agreed to cover any auto that has been involved in a given accident. Those same companies do not base coverage on the name of the driver.
What terms of your policy might ensure coverage of a collision that took place while a friend was driving your vehicle?
Had you purchased collision coverage, before loaning out that same vehicle? Collision covers damages to your vehicle. Still, you would have to pay the deductible, and your insurance rates would increase.
If you had failed to buy collision coverage, then you would get stuck paying for the repairs. The liability portion of your policy should cover any injuries to those in the other vehicle, as long as those do not exceed the limits on your policy. Of course, that provision would not carry any weight, if your friend did not possess a valid license.
If the cost of the damages were to exceed the liability limits, then the court would have the right to go after your assets.
Things to consider, if your friend has said that he or she does possess a license
Was that license granted by the state in which your friend will be on the road? Most states put a limit on the amount of time that a new resident has for obtaining a new license. Once that time has passed, the out-of-state license is no longer valid.
Did your friend commit a crime or have a seizure, after obtaining his or her license? That fact could throw into question the validity of the card with your friend’s license number. Usually, someone applying for the right to drive will be asked whether or not he or she has ever committed a crime, or has ever had a seizure.
If there were questions about the license’ validity, the liability terms in your policy would not force the insurance company to pay for any injuries, as per Personal Injury Lawyer in Barrie. As a result, you would be in the same situation as someone that had insufficient liability limits.
What does that mean? That means that the court could go after your assets, in order to secure money for covering any injuries. Keep that fact in mind, the next time that you agree to loan your insured vehicle to a friend. A good friendship does not guarantee the validity of the document with license number.