Accident With a Borrowed Car in New York: What Happens?

What happens after an accident with a borrowed car depends on whether you gave the driver permission, who caused the accident, and more.

Ben Luthi
Written byBen Luthi
Ben Luthi
Ben Luthi

Ben Luthi has been writing about personal finance for over a decade with the intent to help people improve their finances and lifestyle. Hes covered just about every personal finance topic under the sun for a variety of publications, including the Wall Street Journal, Fortune Recommends, Yahoo Finance, Experian, Credit Karma, NerdWallet, and many more. Ben lives near Salt Lake City with his two kids and two cats.

Katie Powers
Edited byKatie Powers
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Katie PowersSenior Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

  • NPN: 20564519

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

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Updated | Reading time: 4 minutes

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If someone has a collision while driving your car, your insurance may or may not cover the full extent of the damage caused. Car insurance in New York typically follows the vehicle. Ultimately, it depends on whether or not they had your permission to drive the vehicle, the circumstances of the car accident, and how much insurance coverage you have.

Here’s what you need to know about how car insurance works in the Empire State, potential legal responsibilities, and when to consult with an accident attorney.

What happens if the person driving your car causes the accident

In the state of New York, car insurance typically follows the vehicle. So, if a friend or family member who isn’t on your insurance policy has an accident while driving your car, your insurance company may cover the costs based on your insurance coverage limits.[1]

But some exceptions apply. It’s important to know what to expect before you let a person drive your vehicle.

Learn More: How Much Does Car Insurance Increase After an Accident?

Learn More: How Much Does Car Insurance Increase After an Accident?

If the driver is a family member

In New York, the owner of a vehicle is responsible for the damages caused in an accident or collision, as long as the owner gave the driver permission to use the vehicle — also known as permissive use. This is because New York has a broad vicarious liability statute that holds the owner of a vehicle responsible.

So, if you lend your car to a teenager or even an adult family member, the state may hold you liable for any personal injury or damage they cause in an at-fault accident.

If you gave the driver permission to borrow your car

New York’s vicarious liability law extends beyond family members to anyone with permissive use of your car — either with express or implied permission.[2]

But if they get in a car accident doing something that’s outside of the scope of your consent, you may not be responsible for covering the damage.

If you didn’t give the driver permission to borrow your car

If someone takes your car without your consent and has a car accident, you may not need to file a claim for injuries and property damage they may have caused. If the driver has insurance coverage, their car insurance company may have to pay to repair the vehicle and cover liability.

But if they don’t have insurance, you may need to pursue legal action to cover the cost of repairs or replacement of your vehicle.

If the borrower used your car for business purposes

Generally speaking, your personal auto insurance policy may offer coverage for the occasional business operation. But if you lend a car, and the borrower uses it primarily for business purposes — for example, ridesharing — your car insurance company won’t typically cover any damages they cause.[3]

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What happens if the other driver is at fault

New York is a no-fault state, which means you must file a claim for personal injuries sustained by anyone in your vehicle, regardless of who caused the car accident.

The state requires you to maintain $50,000 in personal injury protection (PIP) coverage, which includes the following:

  • Reasonable and necessary medical bills and rehabilitation expenses

  • Eighty percent of lost earnings, up to $2,000 per month for up to three years

  • Up to $25 per day for other reasonable and necessary expenses

  • A $2,000 death benefit

Good to Know

If the other driver is an uninsured motorist or their insurance coverage limits are insufficient, the state’s required uninsured/underinsured motorist coverage can pay for bodily injuries sustained by the driver of your vehicle. But it won’t cover damage to your vehicle or other property.[4]

Why your insurance company might deny a claim when someone else is driving your car

Depending on the circumstances of the car accident, your car insurance company may refuse to pay a claim for damages and liability insurance. Auto insurers may deny your claim for the following potential reasons:

  • You didn’t give permission. If someone steals your car and gets in an accident, they or their car insurance company will typically need to pay for damages.

  • The borrower caused the crash. If you don’t have collision insurance, your insurance policy may cover liability but not damages to your vehicle.

  • The borrower used your car for business purposes. Personal car insurance typically doesn’t provide coverage for exclusive business use of a vehicle.

  • Your insurance policy specifically excludes the driver. In some cases, you may explicitly exclude a driver from coverage. If the driver ends up operating the vehicle and gets in a car accident, your insurance won’t cover the damages.

  • The driver doesn’t have a license. Allowing an unlicensed driver to operate your vehicle is against state law.

  • The insurance company determines negligent entrustment. If you negligently let a person drive your car who shouldn’t operate a vehicle — such as an underage teenager or someone with a suspended license — you may be personally liable for any damages.

Accident when someone else drives your car FAQs

The following information can help you understand your options in the event that someone gets in a car accident while driving your car.

  • Can you sue a friend for crashing your car?

    If you let a friend borrow your car but you don’t have collision coverage or your insurance company denies your claim, you may consider consulting with an accident lawyer to evaluate your options. This may include taking your friend to court to pay for damages.

  • Who’s liable in a car accident in New York: the owner or the driver?

    The owner is typically liable for any damages caused by someone with permissive use of their car. But that may not be the case if someone stole the vehicle or the other driver was at fault.

  • Does insurance follow the car or the driver in New York?

    Auto insurance policies follow the vehicle in the Empire State. If someone borrowing your vehicle has an accident, your insurance company can typically cover the damage.

  • Can you just get into anyone’s car and drive it in New York?

    Operating another person’s vehicle without permissive use in New York is grand larceny in the fourth degree, which is a felony. But if you have permission, you’re free and clear.

Sources

  1. New York State Department of Financial Services. "Re: Permissible drivers under personal automobile insurance policy."
  2. New York State Senate. "Section 388 Negligence in use or operation of vehicle attributable to owner."
  3. Insurance Information Institute. "Insuring Your Business: Small Business Owners' Guide to Insurance."
  4. New York State Department of Financial Services. "Shopping for Auto Insurance."
Ben Luthi
Ben Luthi

Ben Luthi has been writing about personal finance for over a decade with the intent to help people improve their finances and lifestyle. Hes covered just about every personal finance topic under the sun for a variety of publications, including the Wall Street Journal, Fortune Recommends, Yahoo Finance, Experian, Credit Karma, NerdWallet, and many more. Ben lives near Salt Lake City with his two kids and two cats.

Katie Powers
Edited byKatie PowersSenior Editor
Photo of an Insurify author
Katie PowersSenior Editor
  • Licensed auto and home insurance agent

  • 3+ years experience in insurance and personal finance editing

  • NPN: 20564519

Katie uses her knowledge and expertise as a licensed property and casualty agent in Massachusetts to help readers understand the complexities of insurance shopping.

Featured in

media logomedia logo

Compare Car Insurance Quotes Instantly

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