Marie-Claude Dulac

By Marie-Claude Dulac

September 11, 2015


Lended Car: What Does Auto Insurance Cover?

Article revised on 15 June 2017

You’re out partying with a bunch of friends. You’ve had a few drinks, so as a responsible driver, you decide to hand your car keys over to one of your friends. Normal. It’s the right thing to do. There’s no risk involved, right?

Unfortunately, on the drive back home, you’re involved in an accident. Are you covered?

What about if you borrow your parents’ vehicle? Will they receive compensation if you have a fender-bender? Consider this as an automobile insurance FAQ for young drivers.

Driving your parents’ vehicle? Your status as a secondary driver should be declared to the insurer!

If you have just started borrowing your parents’ car, they must inform their insurer and declare you as a “secondary driver”. Based on that information, the insurance company can adjust the coverage to include you and calculate the premium accordingly. Then, if something goes wrong when you’re driving, you will be properly covered. A simple phone call to the insurer and peace of mind for the whole family!

What’s more, by being declared as a “secondary driver” on your parents’ auto insurance, you’ll gain driving experience as a driver that some insurers (as La Capitale) could take into consideration when you buy your first car and apply for coverage. You just might receive a discount on your auto insurance premium thanks to this experience!

However, if you were not declared as a secondary driver on your parents’ auto insurance, the insurer will consider you as an “occasional driver”. With that status, if you were to cause damage to your parents vehicle, the insurance company might not compensate them, alleging that it didn’t have all the information necessary to properly assess the risk. At the most, it might provide them with partial compensation based on the actual premium paid rather than the amount your parents would have paid, had your name been included on their contract.

Lending your car to a friend? Check your coverage!

In Quebec, you can lend your car to anyone who has a valid driver’s licence. If a friend has an accident while exceptionally driving your car, you need to know that the accident will be recorded in your friend’s driving record only. Not in yours.

What if your car is damaged in the accident? It all depends on the coverage provided under your contract. If your friend is found to be not at fault, you will receive compensation based on the coverage provided under your contract. However, if your friend is found to be at fault, you will receive compensation only if you purchased optional collision insurance. And if your friend does not own a car and frequently drives yours, you should add his or her name to your contract.

To be on the safe side, contact your insurer to make sure you have coverage that takes all of the possible risks into account. As a young driver, it’s worth it for you to make sure the insurance you have allows you to take the wheel with full peace of mind.

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