Borrowed Car Accident: Who’s Liable & Next Steps (2025)

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.

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.

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 if they knowingly allow someone who poses a risk to others to use a vehicle. 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

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.

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.