Lending Your Car: What You Should Know
This article is an advertorial brought to you by le Groupement des assureurs automobiles (GAA)
When it comes to insurance, what happens when the person to whom you lend your car has an accident? Here are two common scenarios:
Helping out a friend by lending him your vehicle
You lend your van to a friend so that he can move a large piece of furniture. Unfortunately, on the return trip he causes a fender bender. Will you be indemnified for the damages?
Yes, you will, provided you have insurance that covers damage to your vehicle.
However, your friend may have added Endorsement 27 – Civil liability resulting from damage caused to vehicles of which named insured is not owner – to his insurance policy. The damage may therefore be covered by his insurer. If this is the case, you can choose to file the claim with your insurer or your friend’s insurer.
Note: Before you hand over the keys of your vehicle to anyone, make sure he or she has a valid driver’s licence. In case of an accident, you could risk not being indemnified if the person at the wheel doesn’t have to right to drive.
Lending Your Car to Your Uninsured Son or Daughter
If you didn’t declare that your child drove your car and he or she has an accident, you may only be partially or not at all indemnified.
What is a partial indemnity? Your insurer will reimburse you for the damage in proportion to the premium amount paid versus the premium you should have paid had your child been declared on the policy. For example, you paid a premium of $300 when you should have paid $500 had you declared your child. The insurer will reimburse you 3/5ths of the repair costs.
However, it’s possible that you may not be indemnified. You must let your insurer know which individuals drive the vehicle, even if only occasionally. You also need to inform your insurer of any changes during the policy term.
And in both cases, in whose file will the loss be registered?
Whether it’s your friend or your child, the loss will be registered in the file of the individual at the wheel at the time of the accident (or the individual who had custody of the vehicle when it was stolen or vandalized).
In fact, a loss is attributed only to the “custodian of the vehicle” in the Fichier central des sinistres automobiles (FCSA).This database tracks all losses incurred in Quebec over the past six years and is managed by Groupement des assureurs automobiles (GAA).
Find out more about auto insurance on the GAA web site.