If you've recently lent your car to a friend or relative, only to have it returned damaged (or returned to a scrapyard on the back of a tow truck), you may be wondering about your next steps. How can you pay for a new vehicle or arrange transportation while you wait for your vehicle to be repaired? What if your friend was at fault and caused damage to another vehicle? Is there anything you can do to minimize your future insurance costs? Read on to learn more about how the Insurance Corporation of British Columbia (ICBC) handles claims involving a driver who borrows someone else's vehicle insured under an ICBC policy.
What insurance covers an accident involving a specific vehicle?
Insurance follows the vehicle, not the driver -- so if you lend your car to someone who has his or her own insurance, assuming that this person's insurance will cover any damage to your vehicle if this person is deemed at-fault in an accident, you may be in for an unpleasant surprise if this situation presents itself.
Even though your vehicle is covered by your own insurance (regardless of who is driving), you should always avoid lending your vehicle to someone who has a spotty driving record or who doesn't hold insurance on his or her own vehicle. If this person does cause property or physical damage in an accident with your vehicle, you may be liable for significant punitive damages if the plaintiff can show that you were negligent or reckless in entrusting the defendant with your vehicle.
What will happen to your insurance policy after fault has been assigned for an accident involving your vehicle?
If the person borrowing your vehicle is found to be at fault in the accident, your insurance will help cover both the repair or replacement costs for your own vehicle as well as any other vehicles involved in the accident. If the person borrowing your vehicle (or anyone else involved in the accident) has medical expenses associated with the accident, your policy should cover this as well. However, this coverage comes at a cost to you. It's likely that your vehicle insurance premium will increase significantly for several years following the claim, even though you weren't driving the vehicle. The newer and larger the vehicles on your policy (and the higher the number of vehicles on your policy), the more painful this increase will be.
However, there are a few things that may be able to help you minimize the financial damage of this claim. If you have another type of insurance (such as umbrella insurance) that may provide some coverage, you might be able to negotiate the cost of your claim with ICBC and repay this amount rather than suffering an increase in your insurance premium. You might also be able to take part in a defensive driving program or other educational course to lower your ongoing insurance costs. For more information on ICBC claims talk to professionals like Rella, Paolini & Rogers.
If you've been assessed financially liable for this accident, do you have any recourse against the driver?
British Columbian law is relatively clear -- if a vehicle is borrowed with permission, the person who owns and insures the vehicle is financially and legally responsible for any resulting damage, regardless of whether they were in or anywhere near the vehicle at the time of the accident. However, in many cases you may be able to indemnify (or hold responsible) the person driving the vehicle, especially if you can demonstrate that you did not grant permission for your vehicle to be used in the manner in which the borrower used it, or if you can show that the borrower was being reckless or negligent while behind the wheel.