What Happens If I Lend My Car To A Friend?

Nothing stops you from handing your keys to someone else and lending them your vehicle. According to section 3.2 of the Ontario Automobile Policy, "You are covered when you, or anyone else in possession of a described automobile with your consent, uses or operates it." The policy is very clear.

So what happens if our friend gets into an accident? Simply put it will likely follow you both for a six year period. Section 5 of the Ontario Application for Automobile Insurance asks for "details of all accidents or claims arising from the ownership, use or operation of any automobile by the applicant or any listed driver during the last 6 years."

While your policy may respond to the accident itself, afterwards you and your friend will both be required to disclose the incident to any insurer you approach within the 6 year window. While your friend will not be on your current policy, you will be rated for the accident as if you had it yourself. If in the meanwhile, your friend shops for insurance, they too will be required to report the incident on their application for insurance.

In order to avoid both of you being charged for the same accident, I would suggest you both use the same Broker or Insurer. Using the same Insurer, will allow them to monitor both policies and ensure that someone is being charged for the accident, while at the same time allowing you to make the case that they can't charge twice for the same accident. Using the same Broker will allow you to have a professional representing both of you to the same insurer making sure that things play out properly. If this seems like a lot of work and hassle, it is. The best way to avoid any of this mess is to not lend your car to anyone.