Car loan: what to know about insurance
Contract, conditions, compensation… Update on the rules to apply if you lend your vehicle to another individual.
Lending your vehicle is a great act of trust! But it is also a special legal situation. While insurance companies often provide for the loan of the steering wheel in their contracts, it is important to know the rules to apply and the (possible) consequences in the event of an accident. Here is the point on the main things to know before entrusting your car.
Read your contract!
No, you are not necessarily covered if you lend your vehicle to a loved one. And in all cases, lending a vehicle engages your responsibility. The situation should therefore not be taken lightly. Before giving your car to a friend, colleague or family member, you should read your insurance contract carefully.
This specifies the conditions authorizing - or prohibiting - the car loan. Several formulas exist with the main insurance companies: unrestricted loan (without increased deductible in the event of a claim), loan with increased deductible (this will be higher), vehicle loan except for young drivers, loan ban with the exception of family members (parents, children, spouses) or a total ban on loans.
In addition, the contract binding you to the insurance specifies what an "occasional driver" is, as opposed to the main driver (the insured). If you plan to let a third party drive frequently, you have an obligation to inform your insurer.
A possible amendment
If the occasional driver is not covered by your contract, you can request a contract rider authorizing a loan. In general, online or traditional auto insurance allows you to quickly take out a suitable contract. Your insurer is then logically entitled to request an increase in the rate.
Some conditions must be met in all cases:
the occasional driver must be able to present a valid license
he must use the vehicle under the conditions provided for in the insurance contract
he must be able to present his driver's license, vehicle papers and insurance certificate in the event of an inspection
Also check the experience of the person to whom you leave the wheel: young drivers (less than 2 years of license B) are often the subject of exceptions in insurance contracts. Given their inexperience, they are considered more "at risk" by the companies.
What happens in the event of an accident?
In the event of an accident, insurance coverage may be limited. Two scenarios arise:
If the occasional driver is responsible for the accident, damage caused to third parties (drivers and passengers of another vehicle, damage to property, etc.) is covered by your insurance under "civil liability"
If the occasional driver is not responsible for the accident, repairs will be covered by the responsible party's insurance.
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