Your neighbor’s car is in the shop. He asks to borrow your car to take care of a quick errand. Being a good neighbor, you agree. No big deal, right? Until your neighbor is involved in a car accident and now you are left wondering what happens next and who pays. Many drivers incorrectly assume that car insurance follows the driver, meaning that whoever is listed on your car insurance policy is covered regardless of the vehicle they are driving. This is incorrect. Car insurance follows the vehicle and those drivers listed on the policy with that vehicle. So, assuming you have car insurance, your insurance policy provides the primary coverage of the accident; your neighbor’s car insurance acts as secondary insurance coverage if needed.
Understand your liability when loaning out your car
When you consider loaning your car to a friend, neighbor, or family member, understand that you are liable if they are in a car accident. Your car insurance policy insures not only you and your vehicle, but any family members and others that may use your car, providing they are using the car with your permission. So if you hand over the keys to your car to a neighbor, your insurance policy will be the one covering them if they have an accident. Even if the person driving your car has better insurance coverage than you do, your policy will be the first one covering any damages from a collision. Depending upon your policy and the circumstances of the accident, you may need to meet a deductible on your policy, or face an increase in your car insurance premium as a result.
New Jersey “no-fault” car insurance
All states have individual requirements regarding car insurance. New Jersey, which follows the “no-fault” system, requires that all vehicles registered in the Garden State have Personal Injury Protection (PIP) insurance. Personal Injury Protection pays medical expenses if you or anyone else covered under your policy is injured in a car accident, regardless of who is responsible for the accident. Unlike liability insurance, PIP follows the insured, not the vehicle. If the person driving your vehicle does not have car insurance and is not in the same residence as another person with PIP insurance, then you will be held liable for the damages.
Insurance laws are complicated. Let our experienced New Jersey accident attorneys help you navigate the system
If you did the neighborly thing and loaned your car to someone who was then in an accident, you may be buried in paperwork, insurance claims, and your neighbor’s medical bills. Let us help. The skilled accident attorneys at Brady, Brady & Reilly, LLC have served New Jersey residents for more than 50 years, with a reputation for excellence and a track record of success. We are respected trial lawyers, bringing knowledge, experience and dedication to every case, while serving the best interests of our clients. Arrange a confidential consultation to discuss your case by contacting our office at (201) 997-0030 or online.