Borrowing a friend or family member’s car might seem harmless, but what happens if there’s an accident? In Memphis and throughout Tennessee, accidents involving borrowed vehicles can lead to serious confusion about who is financially responsible.
This guide will help you understand how liability works in these situations. We’ll outline what steps to take after a crash and explain when to contact a car accident lawyer in Memphis.
Key Takeaways
- In Tennessee, insurance usually follows the car, not the driver. If someone borrows your vehicle and causes an accident, your auto insurance policy typically pays first, even if you were not driving.
- Tennessee requires minimum liability coverage of $25,000 per person, $50,000 per accident, and $25,000 for property damage. These limits may not fully cover serious injuries or extensive damage, potentially leaving the car owner financially exposed.
- If the borrower is excluded from your policy or did not have permission, coverage may be denied. In these cases, both the driver and the vehicle owner could be personally responsible for damages.
- Car owners can be held liable under negligent entrustment. If you knowingly allow an unlicensed, intoxicated, or high-risk driver to use your vehicle, you may face legal responsibility if they cause a crash.
- Tennessee’s statute of limitations is typically one year for personal injury claims. Acting quickly after a borrowed car accident is critical to protecting your right to recover compensation.
How Auto Insurance Works in Tennessee: Insurance Follows the Car
In Tennessee, auto insurance typically follows the vehicle, not the driver. This means that if someone borrows your car and has an accident, your insurance usually pays first.
Tennessee’s Liability Insurance Minimums
Tennessee law requires drivers to carry liability insurance with minimum coverage of:
- $25,000 for each injury or death per person
- $50,000 total for all injuries or deaths per accident
- $25,000 for property damage
These minimums may not be enough if the accident causes serious injuries or damage.
What “Permissive Use” Means in Auto Policies
Most car insurance policies include “permissive use” coverage. This means your insurance still applies if you allow someone else to drive your car. However, if your policy specifically excludes the driver, your insurer may deny the claim.
Who Pays After a Borrowed Car Accident?
Liability depends on who caused the accident. It also depends on the type of insurance coverage and if the driver had permission to use the car.
If the Borrower Caused the Accident
If the person borrowing your car caused the crash, your insurance is typically the primary coverage. Their insurance, if they have any, might provide secondary coverage if the damages exceed your policy limits.
If Someone Else Was At Fault
If another driver caused the accident, their insurance should cover the damages. However, your policy might still be involved, especially if the at-fault driver is uninsured or underinsured.
If the Borrower Doesn’t Have Insurance
If the borrower does not have their own auto insurance coverage, your policy will usually cover all damages. This coverage is up to your policy limits. If you exceed those limits, you could face personal responsibility.
If the Borrower Was Excluded from the Policy
If you excluded the driver from your insurance policy, your insurer may deny the claim. This could leave both you and the borrower liable for all damages and injuries out of pocket.
Can the Car Owner Be Held Liable?
Letting someone else drive your car can put your finances at risk, especially if that person is a risky driver.
Understanding Negligent Entrustment
Negligent entrustment happens when you knowingly allow someone to drive your car who should not be driving. This could be someone without a license, with a DUI history, or with a suspended license. If they cause an accident, you may face legal responsibility.
When Your Policy Doesn’t Cover the Borrower
Even if the driver had your permission, your policy might not cover them if:
- They are specifically excluded
- They are using the car for commercial purposes
- The vehicle was borrowed without your knowledge
Always check the fine print in your insurance policy.
Covering Damages and Injury Claims
Accidents often involve more than just fixing a car. You also have to consider injury claims, pain and suffering, and medical expenses.
Property Damage and Vehicle Repairs
The at-fault driver’s insurance typically covers damage to vehicles or property. If someone borrowed your car and caused a crash, your insurer might pay first, especially if the borrower caused the accident.
Medical Bills, Pain and Suffering
Injured parties can file injury claims for medical costs, lost wages, and pain and suffering. This applies whether the driver was the borrower or a third party.
Role of Liability Coverage and Secondary Insurance
Your liability insurance covers others’ injuries and damage. If the borrower also has insurance, that may kick in as secondary coverage if your limits are too low.
Importance of the Accident’s Timing
The time of the accident can impact the claim process. Reporting delays can complicate things. Tennessee also has a statute of limitations that usually provides one year for personal injury claims.
What to Do After a Borrowed Car Accident in Memphis
When a borrowed vehicle is involved in a crash, taking the right steps immediately helps protect everyone involved.
Immediate Steps for the Driver
- Call 911 if anyone is injured
- Document the scene and gather witness info
- Exchange insurance and contact information
- Report the accident to the police and insurance companies
What the Vehicle Owner Should Do
- Confirm if the driver had permission to use the car
- Notify your insurance company immediately
- Review your policy to check coverage details
When to Call a Car Accident Lawyer
If there are injuries, disputed liability, or high repair costs, consult a personal injury lawyer. A car accident lawyer in Memphis can help determine who is liable and how to recover damages.
How to Protect Yourself Before Lending or Borrowing a Car
The best way to avoid financial headaches is to prepare before an accident happens.
Add Regular Drivers to Your Policy
If a roommate, family member, or someone else frequently uses your car, include them in your policy. This will help avoid coverage problems.
Review Your Policy for Exclusions
Make sure your policy doesn’t exclude certain drivers, especially those you let borrow your vehicle.
Use Non-Owner Insurance
If you frequently borrow cars but don’t own a vehicle, non-owner car insurance could be beneficial. It gives you liability protection if you have an accident.
Avoid Lending to High-Risk Drivers
Avoid lending your vehicle to individuals with a bad driving history. If they cause a crash, you could face higher insurance premiums or lawsuits.
Don’t Be Caught Off Guard: Get Legal Guidance Today
Incidents with loaned vehicles can be tricky. Liability may fall on the driver, the vehicle owner, or both. The best way to protect your rights is to speak with a car accident attorney who understands Tennessee law.
If you or a loved one were injured in a borrowed car accident, contact Alders & Lewellyn today for a free consultation.
