Who Will Pay the Compensation if a Friend Crashes Your Car?

Keshav and Uday are best friends from college. They are each other’s go-to friend in times of need. One such morning, Uday calls Keshav to lend him his car for a day. Keshav, knowing Uday for quite some years, happily agrees and gives him his car for the day. A couple of hours later, he gets a call from Uday saying he met with an accident.

Now Keshav has found himself in a spot! Questions start to hover in his mind-

Will my insurance company accept my claim?

Are Uday’s injuries covered under my insurance policy?

Who will pay the compensation for damages?

Like Keshav, you might have seen yourself in a similar situation when lending your car to your friends. Accidents can happen at any time, and the damages can burn a hole in your pocket. These kinds of uncertain events make it necessary to have a car insurance policy. These days you can also buy car insurance online with just a few clicks.

Who is covered by my motor insurance policy?

Although the terms and conditions of motor insurance plans differ among the insurance companies, almost all drivers are covered by your insurer. In case there are specific categories of persons excluded, they will be provided under the terms of your policy under the “excluded drivers” section.

So you can lend your car to any of your friends. Their usage will be termed as “permissive use”. It implies your vehicle is being used with your consent by any other person than the policyholder. The only condition for insurers to cover these situations is the driver should possess a valid copy of the driving license.

The Indian motor tariff states anyone can drive your car under the “permissive use” case. So the next time your friend asks you for your car, don’t worry about your insurance policy including this situation.

Who will pay the compensation for damages?

In an ordinary case, when you meet with an accident, your insurance company covers the damages depending upon the terms of the policy. If you purchase comprehensive insurance cover, any bodily injury or damage to your vehicle shall be borne by the insurance company along with third-party liabilities.

But when your friend meets with an accident, your insurance company will pay the amount of compensation under the ‘collision coverage’ under third party car insurance. Any deductible to your policy shall be borne by you depending on the terms of your policy. In case there is an injury to your friend too, and you have a comprehensive insurance cover, your insurance company shall pay for these injuries also.

However, if it can be proved that the accident occurred due to fault of the other driver, the at-fault driver’s insurer will be liable to pay for damages to your vehicle, as well as for any injury. This way, your insurance policy will remain intact.

You can ensure, irrespective of whether you or your friend is at the wheel, your insurance policy makes sure you remain financially secured. While you purchase your insurance policy, don’t forget to make use of a car insurance calculator. Using this nifty tool, you can compare the various plans offered and select the right add-on as per requirement.