A car insurance ? - hypothetical situation

My dh occasionally lends our car to my BIL & this came up last night. Neither of us knows the answer, so any input would be much appreciated

Let's say you & your spouse have a car that is registered & insured and you lend it to your brother who, let's assume has a valid license & car insurance of his own. While he is driving your car he gets into a serious accident...

Scenario 1: it's not his fault, but your truck is seriously damaged or totaled. Will your insurance cover the damage even though he's not on your policy or will all repairs need to be made out of pocket?

Scenario 2: it is his fault & he seriously injures the other driver & does serious damage to both of your cars. Will your insurance cover the bills, etc of the other driver or will they deny the claim, allowing the other driver to sue you (the owner) for everything you've got?

I come from a family where we NEVER lent cars out, so I'm scared that one day he might get into an accident & next thing we know we're being sued for everything we own

Re: A car insurance ? - hypothetical situation

yes, and yes. Insurance follows the car, not the driver.

As long as he has your permission, he will have coverage if involved in an accident. That includes injury AND property damage (the cars).

As far as a lawsuit, most of the time if someone is injured, they'll sue the driver AND the registered owner of the vehicle. So yes, you would be liable.

Re: A car insurance ? - hypothetical situation

Thank you! That's kind of what I thought, but I didn't know that it follows the car on it's own (I thought you had to actually be on the policy for the car in question)

He's a good guy, but he's young, a bit irresponsible & his driving record is less than perfect so I'm not comfortable with him borrowing our cars...this just proves my point why. It's one thing if my dh or I cause the accident, but why open ourselves up to an increased risk by lending him the car for silly things?

Re: A car insurance ? - hypothetical situation

Look into getting an umbrella policy. They are so cheap $500 a year and it gives you an additonal $1m coverage over an above your regular insurance on car, house, boat, etc... We have one because we have a boat and a teenage driver in the house.

Re: A car insurance ? - hypothetical situation

Yes and Yes

also... in #2.. if your limits are exhausted by the incident his will hope in as excess

Insurance follows the car, yes, but he also has coverage as a permissive user. Someone with permission to drive. Regardless if he had his own insurance or not. So if someone stole your car and caused property damage you are NOT responsible but if you gave the keys to an 15yr old, well I hope you have a good lawyer

Re: A car insurance ? - hypothetical situation

Thanks so much for the advice & insight ladies!