Statistically speaking, you may have been involved in a car accident (or multiple), based on how often they occur in the state of Colorado and across all states. What can be confusing, however, is if you lent your vehicle to a friend and they proceeded to get in an accident. Who is at fault? What happens with your insurance? How do you proceed? This article will discuss these questions and help you protect yourself in this situation.

Which Insurance Company is Responsible?

It can be confusing to try and determine which insurance company to turn to if someone borrows your vehicle and gets in an accident. The insurance policy is actually attached to a vehicle, not a person. (Unless you are talking about underinsured / uninsured motorist coverage which follows the person not the car, but more on that later…) So if your car were in an accident, your insurance policy would be involved, regardless of whether or not you were driving at the time of the accident.

If your friend was the cause of the accident, anyone who suffered injuries could submit their claims to your insurance company. If your friend was injured and it was through the fault of another driver, compensation for injuries would be between your friend and the insurance provider of the other drivers involved in the accident. However, the damage to your vehicle would be between you and the other driver’s insurance.

Who is at Fault?

This question becomes imperative due to the uniqueness of this situation. Typically, when driving your own vehicle and getting into an accident, you would file a claim against the other driver’s insurance to recover vehicle damages if they are at fault. The same applies if your friend gets into an accident with your vehicle, only the friend may feel less urgency in the matter as it is not their vehicle.

How is fault established? If your friend was proven to be texting while driving, intoxicated, or recklessly driving, for example, and this led to the accident, they would be at fault for the accident. The unfortunate outcome is that your insurance will cover these oversights (and any damages) on your friend’s behalf because it was your vehicle they were operating at the time.

Colorado is a fault-based state. Fault-based means that all drivers must carry a certain level of insurance coverage so they are prepared to cover other drivers after an accident in bodily injury, property damage, and total accident liability. Being a fault-based state, it also means that the injured party can file a claim against the insurance company of the driver at fault to obtain compensation for personal injuries.

What if the At-Fault Driver Doesn’t Have Adequate Insurance?

As the insurance policy follows the car and not the driver, the policy of the vehicle driven that was at fault is ultimately responsible for damages. If a friend borrowed your car and they were at fault for an accident, your insurance would need to cover any damages.

What if your coverage isn’t sufficient? In some cases, your friend (as the driver) may include their own personal insurance as additional coverage, or the other party may file a personal injury suit to recover further damages.

It can be exhausting to follow the trail of which insurance covers what in these situations. Working with an experienced attorney can help you navigate who to speak with, what information you need from which insurance company, and negotiate settlement outcomes.

What Is Negligent Entrustment?

When lending a car to a friend, it is crucial to understand its ramifications. If your friend is at fault for an accident, you may open yourself up for a negligent entrustment claim. 

Negligent Entrustment is a separate claim that can be brought against the owner of the vehicle in an attempt to recover damages. If you, as the vehicle owner, knew or should have known that your friend was unfit to operate your car, and this can be proven, you may be subjected to a negligent entrustment claim. Examples of this are if you know that your friend was intoxicated, has a documented history of drunk driving, or reckless driving, does not have a valid license, has physical or mental impairments that affect their driving abilities, and more. Should you be aware of these examples and allow your friend to drive anyway and they injure someone else, you may be liable through negligent entrustment. 

When Should I Consult an Attorney?

Accidents can be scary and frustrating, and when your vehicle is involved but you aren’t, it can create another level of frustration. The inherent need to protect ourselves is essential, but sometimes we don’t know how to effectively do this on our own. It can be crucial to consult an attorney in this situation. Someone who has experience and compassion and can help to ensure that you are protecting yourself to the best of your ability against claims or lawsuits that you may be subjected to.

An experienced attorney can help you to negotiate with insurance companies and help you to avoid saying or doing something that opens you up to more liability. They can help you to establish fault so that the proper parties are held accountable for the accident. Attorneys can investigate eyewitnesses and collect data about the crash site and external factors such as weather, traffic, road conditions, and more.

You don’t have to navigate this process alone. Consult a caring and experienced attorney today. Call our office at (303) 331-6460 to get your specific questions answered and begin the process.