Who Pays for Damages when At-Fault Driver in Borrowed Vehicle?

When most people think of car accident injury claims, they usually think that the at-fault driver is the one who the claim is filed against and it is their auto insurance carrier that will ultimately be responsible for paying the claim, whether through a settlement or through a lawsuit. But what happens if the at-fault driver was not driving their own vehicle when the accident happened? What if the vehicle was borrowed? Who is responsible then?

Who Pays?

In most cases, the actual owner of the vehicle’s auto insurance company will be responsible for damages. One such example would be if the person who caused the crash borrowed the vehicle from a friend of theirs. But there are some circumstances where your attorney will need to pursue the claim differently. These include:

The At-Fault Driver Borrowed the Vehicle from a Person Who Lives in the Same Household

If the owner of the vehicle has the at-fault driver listed as a covered driver on their insurance company, then the owner’s auto insurance will pay. But if the at-fault driver is an excluded driver, the insurance company is not responsible for the damages. You will likely have to file the claim with your own insurance company. Your accident attorney may also recommend filing a lawsuit against the owner of the vehicle for negligent entrustment.

The At-Fault Driver Borrowed a Vehicle and the Owner of the Vehicle Has No Insurance

If the driver of the vehicle happens to have their own insured vehicle, then your attorney can pursue a claim against that insurance policy. At any time that your financial losses exceed their insurance policy limits, you may be able to file a claim with your own insurance policy under your underinsured motorist clause.

The At-Fault Driver Was Driving a Vehicle They Rented

In cases where the driver who caused the crash was operating a rented vehicle, your attorney will likely file a claim against the driver’s own personal vehicle insurance policy. In most cases, the Graves Amendment, a federal law passed in 2005, protects the rental company from being sued.