What Happens If I Get Into an Accident Driving Someone Else’s Car?

Lending your car to a friend or family member is common, but what if someone else is at the wheel when an accident occurs? Or what if you’re the victim of an accident and the car you’re driving doesn’t belong to you?

A whirlwind of questions floods your mind: What’s the next step? Who will be held liable? Will your insurance cover the damages?

Dealing with car accidents is undeniably stressful because you’ll spend days or weeks navigating the insurance claims and legal formalities.

This article discusses how fault is determined, how compensation works if the driver at fault is not the owner or on the insurance policy, and various scenarios that can change the outcome.

Whether you’re a car owner or someone who might drive another person’s vehicle, this information will guide you in the event of an accident.

Understanding Fault in Indiana Car Accidents

After a car accident, determining fault is the first step when someone else is driving your vehicle.

Like many other states, Indiana follows a fault-based system for car accidents. This means that the party responsible for causing the accident is also responsible for any resulting harm or damage. Identifying who is at fault involves analyzing police reports, witness statements, traffic laws, and available evidence from the accident scene.

The at-fault driver, or their insurance company, is typically liable for damages, including medical expenses, property damage, and lost wages.

Indiana’s Comparative Fault System

Indiana operates under a modified comparative fault system, which means a driver can recover damages even if they are partially at fault. However, if they are 51% or more at fault, they cannot recover any damages.

Assessing Insurance Coverage: Who Pays for What?

Suppose you’re driving a borrowed vehicle and another driver hits you. Now, let’s add a twist: the driver who hit you is also behind the wheel of a borrowed car. Who is liable, and whose insurance will cover the damages?

In Indiana, the general rule is that insurance “follows the car.” This means the car owner’s insurance policy should be the primary source for covering damages, even if the person driving it was not the owner but had permission to use the vehicle.

However, the at-fault driver’s own insurance policy may also come into play, particularly if the car owner’s insurance policy limits are exceeded. The sequence usually goes as follows:

Primary Coverage: The car owner’s liability coverage should be the first to cover damages and injuries.
Secondary Coverage: If the car owner’s policy limits are reached, the at-fault driver’s own insurance may cover the remaining costs.

Permissive Use and Insurance Coverage

Insurance coverage for car accidents in Indiana varies based on several factors, one of which is permissive use. Permissive use refers to situations where the driver had the car owner’s permission to use the vehicle. In these cases, the car owner’s insurance typically serves as the primary coverage.

Insurance will approach non-permissive use (like a stolen car) differently from permissive use.

Express Restrictions on Use and Exceptions

Permissive use cannot be assumed if the owner clearly provides certain restrictions and the driver violates those restrictions.

In the case of Briles v. Wausau Ins. Cos., the court clarified an important aspect. They made it clear that if the car owner says, “You can use my car but only under these specific conditions,” and the person using the car doesn’t follow those conditions, the original permission to use the car becomes invalid.

Determining permissive use is fact-sensitive and can also arise in rental car arrangements.

Five-Part Test

Indiana courts apply a five-part test to determine reasonable belief that there was permission to drive a vehicle:

Express permission
Whether use exceeded permission
Legal entitlement to drive
Ownership or possessory right to the vehicle
Relationship with the insured, and the driver could reasonably assume they had permission

The Indiana Supreme Court adopted this test in Smith v. Cincinnati Ins. Co., 790 N.E.2d 460, 461 (Ind. 2003).

Primary and Secondary Coverage

When an accident involves a vehicle driven by someone with permission to use it, the owner’s insurance policy usually serves as the primary coverage. The owner’s policy will be the first to pay out. However, if the costs exceed the limits of the owner’s policy, the driver’s insurance might kick in as secondary coverage.

Liability Coverage

The liability coverage in the owner’s insurance policy is typically the part that pays for any damages to another person’s vehicle or any injuries in an accident if the permitted driver is at fault. It protects the owner from paying out-of-pocket for damages caused by someone else driving their car.

Collision and Comprehensive Coverage

Suppose the owner’s policy includes collision coverage. In that case, it may pay for repairs to the owner’s car regardless of who is at fault. Conversely, comprehensive coverage covers damages to the vehicle from non-collision-related incidents, like theft or natural disasters. This insurance applies if the permitted driver had an accident or something happened to the car while it was in their possession.

Deductibles and Premiums

The owner might have to pay a deductible before the insurance pays for the damages. Additionally, if a permitted driver gets into an accident, it might affect the owner’s insurance premiums.

A Brief Example

Suppose you’re driving a borrowed car, and another driver collides with you but you are not at fault. The damages to the car you were driving are valued at $25,000, and your medical bills are $30,000.

In this situation, the primary coverage would typically be the other driver’s auto insurance, since they were at fault. Their insurance would cover the damages to the borrowed car you were driving and your medical bills up to the limits of the at-fault driver’s policy.

So even though you were driving a borrowed car and were not at fault, both the at-fault driver’s insurance and the car owner’s insurance you borrowed may come into play to fully cover the losses.

Non-Permissive Use

Non-permissive use occurs when someone drives your car without your permission and gets involved in an accident. In cases of non-permissive use, insurance dynamics differ significantly.

For example, in State Farm Mutual Automobile Insurance Co. v. Gonterman, 637 N.E.2d 811, the court decided that no permission was given because the person who had the insurance specifically told her daughter that no one else should be driving the car.

Owner’s Insurance May Not Be Obligated

If someone takes your car without permission in Indiana and gets into an accident, your insurance policy may not be obligated to cover the damages. The reason is that the person driving did not have your permission, so the policy’s provisions regarding permissive use do not apply.

Unauthorized Driver’s Insurance May Apply

If the person who took the car without permission has auto insurance, their policy might be responsible for covering the damages resulting from the accident.

Personal Liability of Unauthorized Driver

If the unauthorized driver does not have insurance, they may be held personally liable for the damages.

At-Fault Driver’s Insurance May Apply

Suppose another driver is found to be at fault for the accident. In that case, their insurance is responsible for covering the damages rather than the car’s owner that was taken without permission.

When Someone Driving a Borrowed Car Wrecks into You

When someone else crashes into your car and they don’t have insurance, this can complicate matters. In Indiana, driving without insurance is a serious offense, and the driver could face penalties.

Several scenarios can unfold:

Their insurance may cover: If the driver of the borrowed car has an active insurance policy with permissive use for other vehicles, their insurance may cover the damages. However, the availability of this coverage can vary based on individual policy terms.
Uninsured/underinsured motorist coverage: If you have uninsured/underinsured motorist coverage and the driver at fault lacks adequate insurance, this coverage can protect you by covering the damages.
Legal liability: The driver could be held personally liable for the damages and injuries caused by the accident. The driver could face lawsuits and significant financial burdens.

Protecting Yourself

Be vigilant on the roads and ensure you have a comprehensive understanding of your insurance policy’s terms.

Consider adding uninsured/underinsured motorist coverage to your policy if you don’t already have it because it can provide additional protection in situations where the at-fault driver is uninsured or underinsured.

If you find yourself in a situation where someone without insurance has crashed your car, you should consult with an Evansville attorney who practices auto accident and insurance law, like Tuley Law, to understand your options.

Get Expert Legal Advice From Tuley Law

Navigating the complexities of insurance and liability after an accident can be overwhelming, especially if the driver involved was uninsured. Don’t face these challenges alone. Our dedicated team of experienced attorneys is here to help.

We practice auto accident and insurance law and are committed to fighting for your rights. Whether you need assistance with insurance claims, understanding your policy, or legal representation, Tuley Law Office has the expertise to guide you through every step of the process.

Let Tuley Law Office be your ally in navigating the legal landscape of auto accidents and insurance in Indiana. Contact us today to schedule your free consultation.

Have questions about your case?