QuestionHi, I have a personal auto policy with minimum liability (25/50/10) insurance coverage. If my I let my relative to drive the car once in a while, what happens if he gets into an accident? (say hit someone's car with damage of $5000)how would the clamis be settled? thank you.
AnswerHi Ray,
As long as the person who you loan your car to does not live in your household you can loan your vehicle to anyone and they will be covered. If they live in your household then they must be listed on the policy as a driver.
If you loan your car to someone and they hit another vehicle causing $5000.00 in damage, your insurance company would pay the $5,000.00 repair cost. In fact they would pay upto the $10,000.00 coverage limit. If the damage that was caused was more then $10,000.00 then the damaged party would likely sue you and your friend for the balance.
I would strongly recommend that you increase your property damage liability coverage to $25000.00. With the value of cars today as well as the high cost of body repair, it is very easy to cause damage that is more than $10,000.00. And if the car was totaled you would be responsible for paying the full value of the car.
I hope this helps
Richard Hixenbaugh
