Lending your car, is it worth the risk?

Lending your car, is it worth the risk?

When you lend your car, whether to a neighbour, a friend or your child, you also lend your auto insurance policy. Here are a few tips to ensure you are well protected and can lend your car in full peace of mind.

National Bank General Insurance
01 December 2015

“Mum, Dad, can I borrow the car?”

As soon as someone living under your roof wants to use your vehicle, even only occasionally, you must notify your insurer

Failing to be transparent and neglecting to inform your insurer may result in the insurer's refusal to pay in the event of a claim, or in the amount of compensation being reduced.

“Hey neighbour, I have a favour to ask”

If you want to lend your car to someone who doesn't live with you, like a friend or a neighbour, there’s no need to run to the phone to make a declaration to your insurer. In the event that driver had the misfortune to be involved in an accident with your car, he or she would be covered under your auto insurance.

Remember, however, that you will be compensated for damages to your vehicle only if you have collision insurance (in Section B of your auto insurance contract).

Covered, even without protection

Some drivers add "Damage to vehicles not owned by the insured" (Endorsement 27) to their contract. If you lend your car to someone who has that endorsement in his or her insurance contract, it may cover any damage to your vehicle in the event of an accident, even if you don’t have that protection.

Check the driver’s license

Insurers authorize the loan of a car as long as the borrower holds a valid driver's license. It’s easy to check the validity of a driver’s license on the website of the Société de l’assurance automobile du Québec. To obtain this information, all you need is the number of the license to be checked and your credit card in order to pay the minimal consultation fee.

Above all, a question of trust

Before you lend your car to someone else, you need to be sure you can trust the driver. If your car is involved in a major traffic violation or if the driver is not in possession of a valid driver’s license, your car could be seized even if you were not behind the wheel. If the driver is responsible for an accident, it’s your insurance premium that could go up…

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