My 21-year-old son has no car and we lost him from our insurance – but he drives friends cars as their designated driver. He is covered by their insurance as long as he has their permit, right? But can he still be liable if an accident exceeds what the owner's cover would pay? Can he buy private insurance that covers him if he drives someone else's vehicle? – Fiona, Toronto
When you drive someone else's car, you lend their insurance in most parts of Canada. And if you crash it, their insurance levels will be a hit. There are some provinces, and some situations where the driver can be at least partially responsible.
"As long as they give you permission and you are qualified to drive, the car is in most cases insured," says Pete Karageorgos, head of consumer and industry relations for the Insurance Bureau of Canada (IBC). "If you are involved in a crash in the error, it goes on their insurance record as a failure."
If you crash someone else's car and you are wrong, the owner's prices would rise over the next six years, just as if they had caused the crash. The crash would remain outside your insurance record.
If the owner could prove that you had driven the car without permission, their insurance company would not cover the crash and remove it from the owner's insurance register. But to do so, the owner must report the car as stolen to the police.
It works differently in Saskatchewan and Manitoba, which have government insurance. In these provinces, the crash would err on the borrower's record and not the owner's record.
In British Columbia, which also has state insurance, it is a little more complicated. There, the crash would go on the borrower's post. But if the owner had not chosen extra coverage for temporary drivers, the owner would pay a one-time penalty, says a spokesman for Insurance Corporation in British Columbia.
Not enough coverage?
What if you crash someone else's car and they don't have enough insurance?
First, a quick review of the three types of auto insurance coverage: liability, collision and comprehensive.
To simplify, liability insurance covers injuries and damages as a driver of other people, vehicles or property. Collision insurance covers damage to the owner's vehicle in the event of a crash. Comprehensive insurance covers almost everything else that is not a collision, including theft and vandalism.
Liability insurance is compulsory, while the other two are optional. Each province requires that you have a minimum liability insurance. It's $ 200,000 in most provinces, but there are exceptions. In Nova Scotia, for example, it is $ 500,000 while in Quebec it is only $ 50,000.
So let's say you drive somebody else's car, drive through the side of a building and you cause $ 2 million in damages. If the owner has only $ 200,000 in liability insurance, "both the driver and the vehicle owner can be personally liable if the claim exceeds coverage," Joe Daly, Desjardins General Insurance Group spokesman, wrote in an email.
Before you borrow a car, it's a good idea to find out what coverage the owner actually has.
Extra coverage for borrowers?
You probably won't be able to buy a stand-alone liability insurance that would cover you when you borrow a vehicle.
"Since liability insurance on a vehicle extends from the vehicle owner's car insurance policy, if you do not own a vehicle, it is unlikely to have a car insurance policy without an owner," Anne-Marie Thomas, senior director of partner relations for interest rate comparison website writes Insurance Insurance e-mail message. "I don't know of any insurance company that offers one."
If you have home insurance, you may also receive an umbrella policy that would give you additional liability insurance to protect you from lawsuits.
An umbrella policy can cost "a few hundred dollars a year," says IBC's Karageorgos. But usually, insurance companies will sell one only if you have both home and car insurance with them.
A 21-year-old without insurance would probably not be able to buy it.
"Insurance companies usually do not sell the umbrella policy to just anyone," says Karageorgos.
Do you have a driving question? Send it to [email protected] . Canada is a great place, so let us know where you are so we can find the answer for your city and province.
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