Lending Your Car?

We all lend our cars to friends, neighbours or family members from time to time. You are happy to help someone when they need it. But is this allowed by your insurer, and what happens if the car is damaged while they are driving? We have put the key points together for you.

You may lend your car for just a day, or for a longer period. Perhaps you are travelling to your holiday destination with others and want to be able to take turns driving. Or perhaps you are the one borrowing someone else’s car. In that case, you naturally want to know exactly where you stand.

The Registration Number Determines the Cover

A car insurance policy is linked to the vehicle’s registration number, not to the driver. This applies to both third-party liability (WA) cover and comprehensive cover, whether limited or fully comprehensive.

When taking out the insurance, the insurer asks who normally drives the car. The premium is based on this information. If someone else drives the car occasionally, this is generally allowed, provided you have given them permission and it remains occasional.

Lending Your Car for Longer? Let Your Insurer Know

If you lend your car for a longer period, inform your insurer. Every insurer has its own rules, so check whether your policy needs to be adjusted.

A partner living at the same address can generally also drive the car, although some insurers require them to be added to the policy as a second driver.

Be careful if you frequently allow a child living at home to drive your car. Do not simply put the insurance in your own name to avoid the higher premium that applies to young drivers. Young drivers pay more because they represent a higher risk. If an insurer discovers this after a claim, there is a significant chance that the claim will not be fully covered.

What Happens If There Is Damage?

In the event of damage, the type of insurance cover you have taken out is decisive. With third-party liability (WA) cover only, damage to the other party is covered. If you also have limited or fully comprehensive cover, damage to your own car may also be covered.

If the person borrowing your car causes damage, you are generally still insured, but you will lose your claim-free years. This means you may receive a lower discount on your premium, or even have to pay a surcharge, and this can continue for several years.

It is therefore important to make clear agreements with the person borrowing your car beforehand, so there are no disagreements afterwards.

Not Every Type of Damage Is Covered

The same exclusions apply when you lend your car as when the regular driver is driving it. For example:

• The driver does not have a valid driving licence.
• The driver was driving recklessly.
• The driver was under the influence of alcohol or drugs.

If you receive payment for lending out your car, for example through a platform such as SnappCar, or if you rent out your car commercially in another way, you may not be insured. This is because the premium is based on private use of the vehicle. Some platforms offer additional insurance cover for this type of use.

Personalised Advice

Are you unsure whether your situation is properly covered, or would you like to know what is best for you? Please feel free to contact us. We are happy to think along with you.