Borrowed Car Accident: Who’s Liable & Next Steps (2026)

What Happens If Someone Crashes Your Car With Your Permission?

Many people don’t think twice before letting a friend or family member borrow their vehicle. However, you might wonder, “What happens if someone borrows my car and gets in an accident?”

Many car insurance policies have a permissive use clause, meaning that if you give someone permission to use your car, your insurance will likely pay for damages if that person causes an accident.

It’s a good idea to be very careful when lending your car to anyone. Although your insurance company will usually pay if the driver causes an accident, you will be responsible for your policy’s deductible.

However, bear in mind that the insurer will only pay if the insurance policy requires it. The claims adjuster will scrutinize the insurer’s duties under the policy’s permissive use clause and your duty to disclose everyone who routinely uses your vehicles.

If the borrower was a non-household member who occasionally used your vehicle, the insurer might be liable under the permissive use clause. However, if the borrower was a household member who routinely used your vehicle, the insurer might deny coverage for your breach of duty by failing to include them on your policy.

Specifically, an insurer and its underwriter rate your policy and set your premiums based on the insurer’s risk. If you fail to list a household driver, they cannot accurately rate your policy. This is particularly true if you deliberately left off a driver because they have a DUI or driver’s license suspension that would drive up your premium rate.

In response, the insurer can deny claims involving the omitted driver, even if they had your permission to use your vehicle.

You might be able to convince the driver to pay you back, but you’re the one who is contractually obligated to pay the deductible if you file a claim.

Likewise, if someone causes an accident while driving your car, your insurance company will likely raise your insurance rates as if you caused the accident yourself. In other words, insurers will account for all paid claims when rating your policy, regardless of the circumstances. The amount of the premium increase will often depend on the claim amount, with greater claims having a greater impact on your premiums. This increase will likely last for at least three years.

When Is a Vehicle Owner Not Liable?

When it comes to whose insurance covers a borrowed car, the car owner’s liability insurance is usually responsible for damages. However, there are exceptions. These are the two most common ones:

1. The Driver Took Your Car Without Permission

Many car insurance policies have permissive use clauses. The “permissive” is critically important — your insurance usually won’t cover damages if someone steals your car or just borrows it without your permission.

2. The Driver Is Excluded From Your Policy

Insurance policies in most states allow you to exclude certain drivers from your policy. You may not always need to exclude someone, but in some cases, excluding a specific driver can prevent your insurance rates from becoming incredibly high.

A common example is if you live with a driver who has a recent DUI. If you don’t exclude this driver from your policy, your insurer might assume you’ll let them use your car — and that may increase your rates. However, if you exclude the driver, their driving record won’t impact your premiums.

In most cases, if an excluded driver uses your vehicle, your insurance policy won’t cover any damage that driver causes.

In a similar vein, if your insurance does not have a permissive use clause (which effectively means all other drivers are excluded from your policy), it’s not likely to cover any damage caused by someone you allow to use your vehicle. Before you lend your vehicle to anyone, you should make sure you understand the terms of your policy.

Special Circumstances: Negligent Entrustment

Your insurance might generally pay for damages caused by someone permitted to use your car. However, in certain cases, you may be personally liable for a borrowed car accident.

Negligent entrustment is a legal concept that holds a car owner liable for their role in causing the accident. In other words, negligent entrustment is not a form of vicarious liability where the law holds the owner responsible for another’s actions. Instead, this doctrine allows a crash victim to hold the vehicle owner responsible for carelessly loaning their vehicle when they knew or should have known that the borrower posed an unreasonable risk to others. These are some situations where you could be personally liable if someone borrows your car and causes an accident:

• You let an intoxicated friend use your car
• You know a friend is unlicensed, but you let them borrow your car anyway
• You let someone borrow your car even though you know they have an extensive history of driving recklessly

Generally, negligent entrustment is a civil claim that arises from ordinary negligence law. However, a few states have criminal statutes for wrongful entrustment. In these states, a vehicle owner may face criminal charges as well as civil liability for carelessly loaning a vehicle. For example, Ohio’s wrongful entrustment law covers a vehicle owner who knows or has reasonable cause to know the driver is unlicensed, uninsured or intoxicated.

For plaintiffs, negligent entrustment lawsuits are often challenging to win. In many cases, a plaintiff must prove that you knew (or should have known) that a driver posed a significant risk but let them use the car anyway.

Moreover, you can present defenses, such as the following:

• The borrower credibly lied to you about their license status or impairment
• You reasonably believed they were a safe driver because you had ridden with them previously
• Your act did not contribute to the cause of the accident

The third factor is important because it applies even if you knew about the other driver’s problem. For example, suppose you suspected the driver was impaired, but you loaned your car to them anyway. While they were driving below the speed limit, they hit a patch of ice, slid through a stop sign and hit another car. In this case, you can argue that you are not liable for the wreck because the ice patch, not the driver’s impairment, was the proximate cause of the crash.

However, even if the plaintiff doesn’t win, handling a lawsuit against you can be stressful and expensive. To avoid facing lawsuits for negligent entrustment, you should always make sure anyone you lend your vehicle to is licensed, has a safe driving record, and is fit to drive when you lend them the vehicle.

What Happens in a Borrowed Car Accident With No Insurance?

If you borrow someone else’s car and don’t have car insurance yourself, you should make sure that the car owner has liability insurance. If you cause an accident and neither you nor the car owner has insurance, the injured person may file a car accident lawsuit against you.

If this happens, you should consult an attorney as soon as possible. If the other party wins a lawsuit against you, you could potentially be liable for thousands of dollars in damages.

How Insurance Works When Someone Borrows Your Car

Many people don’t understand how insurance works when someone borrows a car. As a general rule of thumb, insurance follows the car, not the driver. However, that doesn’t mean your personal insurance won’t come into play.

In motor vehicle accidents involving borrowed cars, the car owner’s insurance is usually primary coverage. This means that if you were at fault for the accident, the owner’s policy usually pays for damages first.

If you have car insurance, your policy may serve as secondary coverage. If the other driver’s damages exceed the car owner’s policy limits, your insurance policy might pay for anything not covered.

Steps to Take After a Borrowed Car Accident

If you’re in an accident with a borrowed car, the steps are relatively similar to the steps you take after any other car accident:

Get to Safety and Report the Accident

If at all possible, check on other people involved in the accident and move to the shoulder or median. Moving out of harm’s way can reduce the risk of a secondary accident.

From there, you should call 911 to report the accident to the police and request emergency medical personnel.

Document the Accident and Exchange Information

While waiting for police and EMS to arrive, take photos and videos of the accident scene and damage to vehicles. If you see any witnesses, ask them for their name and contact information.

Make sure to exchange the following with other drivers involved in the crash:

• Names and contact information
• Insurance information
• Driver’s license information

Keep this information in a safe place. You’ll need to give it to the car’s owner so they can complete an insurance claim.

Seek Medical Attention

EMS personnel can tell you whether they recommend going directly to the hospital or not. Even if you don’t need emergency care, it’s still advisable to visit an urgent care clinic or your primary care doctor. Some types of injuries (even serious ones) don’t show symptoms right away.

Tell the Vehicle Owner

As soon as you can, contact the vehicle’s owner to tell them about the crash. The car’s owner is the policyholder, so they will generally need to file the insurance claim. Give them the other involved drivers’ information, any witness contact information, and any photo documentation you collected.

Report the Accident to Insurance

You and the car’s owner should report the crash to your respective insurance companies. Remember that when you make the initial report to insurance, you aren’t filing an insurance claim — the purpose of the call is solely to inform the insurance company that an accident occurred.

Keep the conversation brief, and don’t go into detail about the accident. Insurance companies listen closely for anything they can use to deny your claim. Some even turn to bad faith tactics (like deliberately misconstruing your statements) to support their bottom line.

You should never agree to give a recorded statement for this reason. Before dealing with the insurance company further, it’s wise to consult an attorney experienced in car accident law.

Do You Need a Car Accident Lawyer?

If you need to file an insurance claim against a negligent driver of a borrowed car, you may run into challenges. For instance, the car owner’s insurance company might try to deny responsibility, and the driver’s insurance might say the vehicle owner’s insurance is liable.

In this case, a car accident lawyer may be able to help you recover the compensation you deserve. Your choice of attorney has a major impact on the success of your case, and if you aren’t sure how to start your search, ConsumerShield can help.

We understand that unless you’re already familiar with the legal system, choosing a lawyer can be a challenge. That’s why ConsumerShield matches people like you with experienced, pre-vetted attorneys. If you need a car accident lawyer or think you might need one, fill out our contact form below to get started with a free case review.