Not long ago I was buttonholed at a party and asked this
question: If I were to loan out my car
with no insurance on it and my friend had a wreck, who would be responsible for
paying for the damages? My first
response was to blanche at the question
of course since driving any uninsured vehicle on the road would be counter to
any advice I would ever give someone.
But to avoid being rude, I tried to lay out for this person just how
this deal might go down.
I want to begin my answer here by stating that I am not an
attorney and so I can’t give legal advice.
What follows is just my opinion and thoughts about the answer to this
question. I want to make is clear that I
feel that no one ever drive an uninsured vehicle on the roads in North
Carolina. Having said that, I understand
that at any given time, up to 15% of the
cars on our NC highways have no valid insurance in force. This happens inadvertently when people forget
to pay their car insurance bill or the payment gets lost in the mail or the
check that they sent to the insurance company bounces. And of course there are also a number of
drivers out there that simply choose to be uninsured for all kinds of other
reasons.
So, how will it play out if you loan an uninsured car to a
friend and they have a wreck that is their fault? Who will pay for the damages? Well, keep in mind that different
circumstances may generate different results but in general both the driver and
the vehicle owner can be held liable for the damages. Can you demand that your friend pay for the
damages and leave you out of the matter?
Of course you can but whether or not you succeed will probably depend on
if your friend knew the car was uninsured when he borrowed it, as well as the
nature of what caused the accident and the degree to which your car’s condition
had an impact on the accident happening in the first place. Either way, I would advise that both parties
hire counsel to help sort this out.
Your friend may have some insurance protection that from his
own personal
auto insurance policy if he has one in place on his own cars. If that is the case, then he has protection
for himself, but not for you. If he
relies on his insurance company to step in and pay the first dollar damages,
then probably his insurance company will sue you for the damages that they paid
out on his behalf.
Now, if you are choose not to insure your vehicle and you
loan it to others, you should know that you are increasing your own financial
risks by adding another driver and his or her skill to your uninsured
liabilities. What I said to the person
at the party who asked me this question is that if you are taking the time to
worry about this before you loan out your car, then why not take the time to buy an insurance policy for
your car before you loan it or even drive it yourself.
If you find yourself without insurance on your car, please
don’t drive it until you have insurance in place. If you would like help with your auto
insurance policy, or if you just have questions about car insurance in North
Carolina, please call us, toll free, at 877-687-7557 or visit us on the web at www.ClinardInsurance.com. We can also help you with your home
insurance policy, your life
insurance needs or even your business
insurance.
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