Ever wondered what happens when someone borrows your car and gets into an accident? Or maybe you have been hit by someone driving their friend’s vehicle? These situations can get messy fast.
Every day, thousands of accidents happen involving borrowed cars, shared vehicles, and drivers who don’t own the vehicle they are operating. The questions that follow are always the same: “Whose insurance covers this?” “Who’s legally responsible?” and “What happens if the damages exceed the insurance coverage?”
In this guide, we will explain everything you need to know about liability if an accident is caused by a driver who borrowed someone else’s vehicle. A Hackensack car accident lawyer can help you determine who is responsible and ensure you receive the compensation you deserve.
The Basic Rule: Insurance Follows the Car
Here’s something that might surprise you (or not)—in most cases, car insurance follows the car, not the driver. This principle, known as permissive use coverage, means that your auto insurance provides primary coverage for most people who use your car with your permission.
Think about it this way: when you buy car insurance, you’re essentially insuring the vehicle itself and anyone who might reasonably drive it. This coverage typically extends to family members living in your household, friends who occasionally borrow your car, neighbors in emergencies, and even mechanics test-driving your vehicle. In New York, for example, actual operation or use must be within the scope of the permission for personal automobile insurance to apply, according to the state’s Department of Financial Services.
But there’s more to the story. Your policy might have different coverage limits for non-listed drivers. Some policies reduce coverage to state minimums for non-listed drivers, while others maintain full coverage. And here’s something many people don’t realize: if the person borrowing your car has their insurance, it usually acts as secondary coverage if the damages exceed your policy limits.
When the Car Owner Is Liable
A car owner’s responsibility extends beyond just maintaining their vehicle. They have a legal duty to ensure your car isn’t a danger to others, and that includes being careful about who they let drive it.
Negligent Entrustment
This legal concept holds you responsible if you let someone drive your car when you should have known they might be dangerous behind the wheel. Negligent entrustment occurs when you allow someone to drive despite knowing about their:
- poor driving history;
- multiple accidents;
- previous DUI convictions;
- a suspended license or
- other relevant circumstances.
It also applies when you let someone drive who is intoxicated, extremely fatigued, or experiencing a medical condition that can impair their driving ability. Courts around the country, including New York, take negligent entrustment seriously.
- Fact: In one case, the Supreme Court of the State of New York ruled that a car owner may be liable for negligent entrustment when they knew or should have known through an exercise of ordinary care that the person they were entrusting their vehicle to was not competent to operate it.
Permission to Drive
Permission isn’t as straightforward as you might think. Courts recognize different types of permission, and each can affect liability:
- Express permission includes any explicit agreement to use the car, whether verbal or written. This might be a simple “yes” when someone asks to borrow your car, or it can be a detailed written agreement specifying when and how they can use it.
- Implied permission is trickier to define but just as legally valid. This occurs when there’s a pattern of regular use without asking, such as when spouses share vehicles or when adult children living at home regularly drive their parents’ cars.
Courts look at factors like where the keys are kept, the history of vehicle sharing, and the relationship between the owner and driver.
Regular Access
When someone has regular access to your vehicle, it creates a presumption of permission that can be hard to overcome. This typically includes household members like spouses, driving-age children, and parents living with you. It can also extend to employees using company vehicles, caregivers who regularly transport clients, and family members who frequently borrow the car even if they don’t live with you.
When the Driver Is Liable
Sometimes, the person behind the wheel bears full responsibility for an accident.
No Permission
People who use a car without permission typically become fully liable for any damages. Unauthorized use ranges from taking the car without asking to traditional theft or carjacking. Even keeping the car longer than permitted or using it after permission was explicitly denied can shift liability to the driver.
Outside the Scope of Permission
Even when someone has permission to use someone’s car, they might exceed the scope of that permission. Consider a scenario where you let someone borrow your car to run local errands, but they instead take it on a long-distance trip. Or you allowed daytime use only, but they drove the vehicle late at night. These violations of the agreed-upon terms can transfer liability to the driver.
Commercial Use
Using a personal vehicle for business purposes without proper authorization creates serious liability issues. According to the Insurance Information Institute (III), a personal automobile insurance policy may provide no coverage if a vehicle is used primarily in business.
Many personal auto insurance policies specifically exclude coverage for commercial activities. It means if a driver uses someone else’s car for unauthorized business purposes, such as food delivery, rideshare driving, or courier services, they might be personally liable for any accidents.
What About Insurance Coverage?
Insurance coverage in borrowed car situations follows a specific hierarchy that determines who pays what and when.
Primary coverage always comes from the owner’s insurance first. It makes sense because, as discussed earlier, insurance follows the car. The owner’s policy handles initial claims, provides defense costs if needed, and applies its policy limits to any damages.
Secondary coverage from the driver’s personal insurance only kicks in when the primary coverage is exhausted. It might happen in severe accidents where damages exceed the owner’s policy limits. Depending on their policy terms, the driver’s insurance might provide additional liability coverage, rental car costs, or personal injury protection.
Special Considerations for Rideshare and Delivery Services
Have you been hit by someone doing deliveries or ridesharing in a borrowed car? This situation adds an extra layer of complexity to an already complicated scenario. Here’s what makes these cases different.
Most personal auto insurance policies explicitly exclude commercial activities like food delivery or rideshare driving. If someone borrowed a car to make DoorDash deliveries or pick up Uber passengers, they might have unknowingly voided the car owner’s insurance coverage. It means you can end up in a situation where the owner’s insurance denies the claim entirely.
But don’t panic: you may still have options. Rideshare companies like Uber and Lyft provide commercial insurance coverage for their drivers, even if they’re in borrowed vehicles. The catch? This coverage only applies when the driver is actively using the app. Different coverage rules apply if they were between rides or had just turned off the app.
For delivery services, it gets trickier. Some services provide commercial coverage, while others don’t. DoorDash, for instance, only provides excess coverage after the driver’s personal insurance is exhausted. Instacart expects drivers to have their own commercial insurance.
If you’ve been hit by someone using a borrowed car for these services, document everything about what the driver was doing at the time. Were they actively delivering an order? Did they have their app on? Was there a passenger in the car? These details can make a huge difference in determining which insurance coverage applies to your case.
Your Rights as an Accident Victim
When you’re hit by someone driving a borrowed car, you have the same rights as in any other accident—and sometimes even additional options for recovery. Understanding these rights is fundamental for protecting your interests.
Have Access to Multiple Sources of Recovery
As the victim, you’re not limited to making a claim against just one party. You can potentially recover from:
- The owner’s insurance policy (primary coverage)
- The driver’s personal auto insurance
- Your insurance (if you have applicable coverage)
- The vehicle owner’s personal assets
- The driver’s personal assets
This means you have multiple paths to getting your damages covered, which can be especially helpful if your injuries are severe or if one insurance policy has low limits.
Right to Expect the Insurance Company to Act with Good Faith
Remember this: insurance companies, whether they represent the car owner or the driver, are not on your side. They may try to:
- Shift blame between the owner and driver
- Delay processing your claim while they investigate permission
- Offer quick, low settlements before you understand your full damages
- Deny coverage based on policy exclusions
Don’t let them pressure you into accepting less than you deserve. They must fulfill their obligations with honesty and integrity.
Right to Independent Investigation & Legal Representation
You have the right to conduct your investigation of the accident, independent of what insurance companies are doing. It includes:
- Hiring accident reconstruction experts
- Obtaining surveillance footage
- Interviewing witnesses
- Accessing police reports
- Examining vehicle damage
- Reviewing maintenance records
Never forget that you have the right to legal representation, regardless of what insurance adjusters might tell you. A car accident attorney can help conduct an in-depth investigation to strengthen your case and maximize your financial recovery.
Why You Need an Attorney After a Borrowed Car Accident?
After being hit by someone driving a borrowed car, you might be wondering if you need a car accident lawyer. After all, insurance should cover everything, right? Well, borrowed car accidents can be trickier than your typical fender bender, and here’s why.
When you’re hit by someone in their own car, there’s usually just one insurance company to deal with. But in a borrowed car situation, you’re potentially dealing with multiple insurance companies who might point fingers at each other.
The vehicle owner’s insurance might claim the driver wasn’t permitted to use the car. The driver’s insurance might say they’re only responsible for excess damages. Meanwhile, you’re stuck in the middle, trying to get your medical bills paid and your car fixed.
These cases are particularly complex because they often involve:
- Multiple insurance policies with different coverage limits
- Questions about driver permission and authorization
- Disputes between insurance companies over primary coverage
- More complicated liability investigations
- Additional paperwork and documentation requirements
Some situations practically scream for legal representation. If the accident caused serious injuries requiring ongoing medical care, you need a lawyer. Why? Because calculating future medical expenses is complicated, and you don’t want to accept a settlement that leaves you paying out of pocket down the road.
- Fact: Did you know that the average cost of an evident injury due to a car accident is $42,000, according to the National Safety Council (NSC)?
Watch out for insurance companies giving you the runaround. If they’re delaying your claim while they “investigate” whether the driver had permission or if they’re making lowball offers, these are red flags. Insurance adjusters know that borrowed car cases are complex; some might use this to their advantage.
What an Attorney Can Do for You
You might be surprised how much a car accident lawyer can help in these situations. First, they know exactly where to look for all available insurance coverage. There might be policies you didn’t know can apply to your case. They can also help prove that the driver had permission to use the vehicle—something that insurance companies often dispute.
A skilled car accident attorney will:
- Identify all potential sources of compensation
- Handle communications with multiple insurance companies
- Gather evidence to prove the driver’s permission
- Calculate the full value of your current and future damages
- Negotiate with all parties simultaneously
- Prepare your case for court if necessary
Many people don’t realize that having a car accident lawyer often means getting your car fixed and medical bills paid faster. How? Because insurance companies tend to be more responsive when they know you have legal representation. They’re less likely to play games or delay your claim.
Still not sure if you need a lawyer? Here’s a suggestion: take advantage of a free consultation. Most car accident attorneys offer them, and there’s no obligation to hire one afterward. During the consultation, a lawyer can evaluate your case, explain your options, and help decide if legal representation makes sense for your current situation.
A Car Accident Attorney is Standing By
Remember, the insurance companies started working on this case on the day of your accident. They have teams of adjusters and lawyers protecting their interests. You deserve to have someone in your corner, too, especially in a complicated situation where the other person was driving someone else’s car. A Hackensack personal injury lawyer can provide the legal guidance you need to navigate this complex claim and fight for the compensation you deserve.
