Have you ever had a friend ask if they could borrow your truck to move a piece of furniture? Have you ever had a child or sibling request to use your vehicle a couple times, so they don’t need to take public transport to get to work? If you’ve had the opportunity to help a friend or family member out, by letting them borrow your vehicle, it’s good to know what kind of use is – and isn’t – covered by your car insurance policy.

Scenario 1: Lending your vehicle to help someone move

Whether it’s to help move or just a very rare instance that someone you know needs to borrow your vehicle, your own insurance policy should cover damage incurred while they’re driving, as long as the guest driver is:

• Licensed to drive in Canada (not including a learner’s permit)
• Has your permission (written or verbal) to drive your vehicle
• Isn’t participating in illegal activity while driving (driving intoxicated, street racing, etc.)
• Obeys the rules in your policy (if your policy is for personal use, the person borrowing your car can’t be using it for a delivery job)

If you have collision/comprehensive (full) coverage on your car, your friend is covered for damage they cause to the other person’s vehicle, as well as yours. If you have 3rd party liability coverage (the minimum coverage required by law in Canada), your car insurance policy would cover damage to the other vehicle but not your vehicle.

*NOTE* The outcome of their driving affects your driving record. More on that later.

Scenario 2: When to add a driver to your policy

If someone is borrowing your car a couple times a month, some insurers will deem that as a ‘’regular basis’’. In this scenario, you’d need to add the person to your car insurance policy as an occasional driver. If a person is borrowing your vehicle in a ‘’one-off’’ situation, then you wouldn’t need to add them as an occasional driver.

Insurance companies do not have a linear set of guidelines regarding what makes someone an occasional driver. They can have varying requirements that qualify someone as an occasional driver, so it’s best to verify the frequency someone else will be using your vehicle, then touch base with your broker to see if your policy needs updating.

As mentioned above, your auto insurance policy will cover them to the extent of your policy, in the event of an accident, as long as they aren’t participating in illegal activity.

Myth: Their at-fault accident, in your vehicle, won’t affect your driving record

Contrary to popular belief, if a friend or family member is borrowing your car and gets into an accident, the resulting car insurance implications go on your record, not theirs (applies to both of the above scenarios).

Economical Insurance, one of Surex's partner insurers, put it best: If you’re trusting someone to borrow your vehicle, you’re also trusting them to borrow your insurance policy.

Before deciding to lend your vehicle to a family member or friend, it’s a good idea to consider how confident you are in their driving ability, as their actions could have a direct impact on your car insurance premiums.

Make sure you understand your policy and coverage

Before allowing a family member or friend to drive your vehicle, it’s important to understand your car insurance policy and, potential, implications for you. Verify your coverage with your broker and be honest about the amount and type of use your family member or friend will have with your vehicle.

Just as you want to be sure you’re fully covered for when you're on the road, you need to have that same confidence when allowing someone else to borrow your vehicle. Check also this post about adding a child to your auto policy.