Lately , we’ve received a number of calls from Ontario drivers wanting more information about lending their cars to friends and family members . Of course there will be situations in life where it just makes perfect sense and is convenient to lend your car to someone. As Ottawa personal injury lawyers, we must caution you on making the decision to whether or not lend your vehicle to someone who is not listed on your insurance policy. There are certain risks and liabilities for both the owner of the vehicle and the driver who is borrowing the vehicle, that we feel needs to be brought to the attention of the people of Ontario.
Can your insurance premiums change if you loan your vehicle to someone?
The Ontario insurance regime was set up that you can loan your car to someone because your insurance policy follows your vehicle. This means that even if you aren’t in your car and you loan your vehicle to someone who gets into an accident in your vehicle, they may be covered. In essence, they may be “using” your insurance policy. Of course, this does mean that should they get into an accident and they are at fault, yes, your insurance premiums may be affected moving forward. If your friend or family member is in an at-fault accident while driving your car, your insurance premiums could be affected. If they happen to have their own insurance, then they would access their own Accident Benefits but if they do not, they would access Accident Benefits through your insurance policy.
What you need to think about before loaning your vehicle to someone…
When loaning your vehicle, remember you do not have to disclose the names to your insurance company however, it’s best to remember the following:
- You must agree either verbally or in writing that you are loaning your vehicle to the intended driver.
- If you are loaning your vehicle regularly to someone ( ex once a week) you must inform your insurance company and have them added as an occasional driver. There is often no extra charge in doing so.
- Make sure that the person you are loaning your vehicle to has a valid driver’s licence and that this licence is valid in the province that you both live in
- Provide a copy of the registration and proof of insurance in the car and let the borrower know of their location
- Ensure the person you are loaning your vehicle to knows not to let anyone else drive the car.
The Insurance Bureau of Canada
The Insurance Bureau of Canada (IBC) states “ Risk management involves identifying and understanding risks. Whether you’re lending your vehicle or participating in a vehicle exchange, you can limit your exposure to risks through loss prevention techniques.” IBC offers many tips on managing these risks on their website www.ibc.ca
Knowing the implications of loaning your vehicle is important. For more information on Accident Benefits , visit www.ottawainjury.ca/insurance-claims