Borrowed car, accident – then what??

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Oh my! An accident with a borrowed vehicle can have expensive consequences if the driver is not registered in the insurance policy. © habermann / ZVW

Waiblingen. "can you lend me your car for a moment?"who can refuse a nice neighbor, a colleague or a relative a friendly service?! At best, with a reference to the relevant insurance clauses: "I would like to, but unfortunately the insurance does not pay . " this is wrong. Motor vehicle liability always pays out. But the trouble could start afterwards.

Anyone who takes out an insurance policy for their car today is squeezed like a lemon. A lot of details about the personal life and professional circumstances are requested, so that the algorithms of the actuaries can calculate a premium corresponding to the accident risk. Among other things, the following principle applies: the more and the younger the drivers, the higher the risk. Why insurers ask for confirmation that only the owner and usually the partner are on the road with the car.

What happens if I lend my car to a friend or colleague and they have an accident?? Will the insurance company not pay??

motor vehicle liability insurance pays justified claims for damages even if the friend causes the accident, the federation of insureds answers our inquiry. This would mean that the vehicle liability would cover the damages that the driver causes to third parties with the car. "however, it only pays to a limited extent if the driver was driving under the influence of alcohol or drugs, for example, or without a driver’s license, or if he or she has committed a hit-and-run accident," restrict the consumer protectors. In the case of comprehensive insurance, it could be that the insurance company reduces benefits in the event of damage caused by gross negligence on the part of the driver.

"in fully comprehensive insurance, if there is a breach of duty, for example if the vehicle owner has not notified the changed use, the insurance cover can lapse completely or the benefit can be reduced," explains dr. Tibor pataki, head of motor insurance, motor vehicle technology and statistics at the german Insurance association (GDv), explains the legal situation. Can, not must!

Clarify financial consequences with contract

One thing is clear: in the event of an accident, the no-claims bonus of the policyholder – and not of the person who caused the accident – is lost! – floten. premiums rise in the following years. This can be a considerable sum of money. These financial consequences must be clarified in advance either with a contract, which probably no one does with a good neighbor, nice colleague or close relative. Or you have to rely on the person who caused the accident to be responsible for the consequences and not just be your friend when you take the car.

"you can lend your car free of charge," assures gerald epple, claims manager at WGV insurance in stuttgart. The emphasis is on "free of charge". If you regularly lend out your car and thus operate a kind of private car-sharing in the neighborhood, you are of course in breach of your contract, in which for cost reasons only a limited group of people are registered as drivers.

Can motor vehicle liability take recourse against the policyholder and claim damages??

The vehicle liability insurance can take recourse against the vehicle owner up to a limit of 5,000 euros, according to the German Insurance Association. The automobile club (ACE) recommends taking a close look at an insurance contract to see whether, for example, the favorable premium is linked to the clause that the car will only be used by the owner and his partner. "so before taking out insurance, think about the purpose for which the car will be used," says the ACE. In the contracts, a distinction is also made as to whether a novice driver is allowed to drive or a driver over the age of 25. The risk for young drivers is higher, so premiums are correspondingly higher.

What are the consequences if an accident does occur??

If the insurance policy states that third parties are not allowed to drive the vehicle, but they do and an accident occurs, then contractual penalties are possible, according to the ACE. Incidentally, this is also an important point when renting a car on vacation. Even if the exclusion is not stated in the insurance policy, it is advisable to have the driving authorization of a third party recorded in the contract if this is regularly planned. Also the height of a possible contract penalty would have to be regulated in the policy.

Consumers should know: the contractual penalty, i.e. if a third party drives without authorization and causes an accident, can in some circumstances be as high as an entire year’s premium. Since the policyholder has made false statements in the contract, he may also have to pay back all previous discounts, according to the ACE: "He may even be refused settlement of claims in the case of comprehensive insurance damage."

If a breach of contract leads to termination of the contract?

Not necessarily, says the automobile club. In principle, a contract can only be terminated at the end of the insurance year or extraordinarily after a claim, adds the association of insured persons. On the part of the insurance company as well as on the part of the policyholder. If the insurance company has issued the cancellation, there is no return. The insured must seek a new contract, which often leads to difficulties in the event of cancellation. "the fact that the previous insurer has cancelled the contract can already cause the new insurer to reject a comprehensive insurance application or to accept a liability application only at the minimum insurance sums," write the consumer protectors (see also: 30. November).

How can I lend my vehicle without any risk?

By registering the driver with the insurance company. "if the relative or friend who wants to use the car is not part of the insured group of people, it is no problem to register him or her subsequently – but before use," recommends ADAC insurance. Either by expanding the group of people altogether or by granting an exemption, ADAC insurance cites the example of the cousin, 28 from america, who is visiting for four weeks and wants to use the car. "it’s mainly a matter of the person being registered"."

Can it be worthwhile to "take a chance" that no accident will happen?

"no, absolutely not," advises the ACE against taking the risk of letting a third party drive without having reported this to the insurance company. This includes one’s own child as a novice driver who uses the family car from time to time. "the consequential costs are too high should something happen."

Oops! That’s a pretty expensive thing to do, that driver’s license. Suddenly the child is an adult, has a driver’s license and gets behind the wheel himself. Insurance companies pay dearly for the increased accident risk for the family car.

The small car has so far cost less than 300 euros a year in insurance. Including fully comprehensive insurance with a 150-euro deductible and partially comprehensive insurance without a deductible. Let’s see what the 60-hp car will cost in the future if the soon-to-be 18-year-old son is registered as driver. The new premium calculation shows a premium of around 475 euros for accompanied driving and 575 euros when he will be driving alone in a few months as an 18-year-old. The premium has almost doubled. The question of whether such a doubling of premiums is justified is answered succinctly by the association of insured persons: "yes, because with this group of drivers, the risk of causing an accident with the car increases as well."very young drivers and especially novice drivers have a statistically increased risk of accidents. The same also applies to older drivers, for whom the premiums then often also increase.

Premiums vary from insurance company to insurance company

Is a change of insurance worthwhile?? The amount of the premiums or the premium adjustments vary from insurer to insurer, sometimes considerably, according to the consumer protectors. However, the tariff calculator of the association of insured persons does not show any more favorable insurance in a specific case. On the contrary. Among the 15 cheapest insurers are some that charge up to 950 euros for liability and comprehensive insurance for a small car.

Regular termination only at 30. November possible

By the way, a contract can’t be canceled just because the premium doubles if your son or daughter also uses the family car in the future. Keyword: special right of termination in the event of premium increases. "This is a contract extension, similar to increasing the annual mileage," says ADAC car insurance. A regular cancellation on the part of both the policyholder and the insurance company itself is only possible at the end of the insurance year with the date 30. November possible as well as in the case of a premium increase or after a claim. the automobile club of europe (ACE) advises to pay attention not only to the price but also to the small print of the insurance conditions when making a comparison. So not all wildlife damage is the same. Whether marten bites or a collision with a cow and a sheep are also insured can be reflected in the premium, explains a spokeswoman for the insurance industry association.

Insurers can impose contractual penalties

In view of the higher premium, it is tempting to simply hand the ignition key to the young driver and hope that he will not cause an accident . Both consumer protection agencies and automobile clubs, such as the insurance companies, advise against taking the chance and not reporting the young driver. Insurance coverage remains in effect, provided the damage was not caused intentionally or unlawfully. But insurers can impose contractual penalties, such as asking for the actual premium to be paid in arrears or even imposing a contractual penalty in the amount of the actual annual premium if they can prove that false statements were made intentionally. The dents on a colleague’s car show that the increased risk of accidents for new drivers is not just the product of insurance companies’ imagination. Their 17-year-old daughter wasn’t paying attention when she was parking and got in the way of a passing vehicle. Bad luck.

30. November

It is changeover time in car insurance: until the end of november 2017, most car owners can cancel and switch to a new provider, according to the stiftung warentest foundation. The price differences are enormous. Even those who already have low-cost insurance should check again whether their own car insurance is still among the cheapest on offer.

One thing to keep in mind, though: you shouldn’t cancel your insurance until you have the commitment of the new insurer has. It is also difficult to find a new insurance policy if the old one has been canceled.

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