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HOME : Just the FAQs Ma'amLending Your Car - Beware Of The Insurance PitfallsMy neighbour asked if he could borrow my car to run some errands. He has a driver's license, but he doesn't own a car and therefore doesn't have an insurance policy either. Would he be covered if he was driving my car? Yes, he would be covered - but don't hand over those keys too fast! When you lend your car, your insurance policy goes along for the ride. In other words, your car insurance covers any person who has a valid driver's license and who operates your car WITH YOUR PERMISSION. That means that if your neighbour were to cause an accident while driving your car, your insurance would pay for any damage or injuries. That gets him off the hook, but it puts you right in the driver's seat - his accident would go on YOUR insurance record, and your insurance premiums would go up accordingly. That's a risk you may not want to take. While I'm sure you want to do the neighbourly thing, borrowing your car is not like borrowing a cup of sugar! Special warning to Ontario drivers: Under a recently passed law, if you lend your car to someone who drives it while his or her license is under suspension due to a criminal code conviction, your car will be impounded for a minimum of 45 days. To make matters worse, you have to pay the towing and storage costs, which could be as high as $1,000 for that length of time. As the owner of the car, you could appeal the impoundment only on the following grounds: that you could show that the vehicle was stolen at the time the driver was caught; that you could prove the driver was NOT under a criminal code suspension; or if you had exercised "all reasonable efforts" to ensure the driver had a valid driver's license. You can find out if someone's license is under suspension by calling 1-900-565-6555 with the person's license number. It will cost you a few dollars to check, but it's well worth it if you have any doubts. No matter where you live, it's a good idea to make sure that anyone who borrows your car has a valid driver's license. And even if they do, are you willing to lend not just your car but your insurance too?
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