In Texas, insurance generally follows the car. An owner’s liability policy must cover anyone driving the vehicle with the named insured’s express or implied permission, so your policy is usually the first coverage when a friend or relative causes a crash in your car, and the driver’s own policy may add more.
Transportation Code section 601.076 requires an owner’s motor vehicle liability policy to pay on behalf of the named insured and any other person who uses a covered vehicle with the named insured’s express or implied permission. In practice, if you let a friend, roommate, or relative borrow your car and they cause a crash, the people they hurt look first to your liability coverage, and the driver’s own policy may apply as excess.
Permission is the key fact. Express permission is easy: you handed over the keys. Implied permission comes from a pattern of use, like a household member who regularly drives the car without asking. A driver who took the car without permission, or a thief, is generally outside the owner’s coverage, and the injured person turns to their own uninsured motorist coverage.
If you were the one hurt, riding as a passenger in your own car while someone else drove, the analysis changes. You may have a claim against the driver, which can involve your own liability policy, plus your personal injury protection benefits. Texas still has a guest rule in Civil Practice and Remedies Code section 72.001: a passenger riding without paying who is related to the driver within the second degree, including a spouse, can recover only for intentional or heedless and reckless conduct. Policy exclusions can also matter, so the actual policy language should be read before anyone assumes coverage.
Lending a car can create the owner’s own liability, too. A negligent entrustment claim argues that the owner knew or should have known the driver was unlicensed, incompetent, or reckless and lent the car anyway.
Teen drivers raise these issues most often. A parent’s policy typically covers a teenager in the household, and the parent may face a negligent entrustment argument if the teen had a record of unsafe driving. When a teen borrowed a friend’s family car, the friend’s family policy usually applies first as the owner’s coverage, with the teen’s own household policy behind it.
A crash someone else causes in your car can affect your premium, and the Texas Department of Insurance says insurers may raise rates after accidents. Owsley Law Firm reviews the policies on both sides, and the consultation is free.
What to do, step by step
- Report the crash to your insurer even though you were not driving.
- Get the borrower’s own insurance information.
- Photograph the vehicles and the scene.
- Keep a copy of your policy and declarations page.
- Talk to a lawyer before giving any recorded statement.
Coverage disputes in borrowed-car cases often come down to exclusions. Some policies exclude named drivers or household members who are not listed, and insurers sometimes rely on those clauses. The policy and its declarations page, not general rules, decide coverage, so get a copy early.
If a family member hurt you, the claim is against their coverage, not against the relationship. Insurance exists so that injured family members can be compensated without someone paying out of pocket, and the guest rule applies only to certain non-paying relatives within the second degree.
The driver’s own policy can add coverage. If the borrower owns a car and carries insurance, that policy may apply as excess after the owner’s coverage is used up. In a serious crash, stacking the owner’s limits, the driver’s limits, and the injured person’s own underinsured motorist coverage can make the difference between a recovery capped at the minimum and one that covers the losses.
Mistakes that cost people money
- Assuming the borrower’s policy pays first.
- Failing to report the crash to your own insurer because you were not driving.
- Lending a car to someone you know is unlicensed or impaired.
- Guessing at coverage without reading the policy’s exclusions.
Related questions
Will my rates go up if a friend wrecks my car?
They can. The Texas Department of Insurance says insurers may raise rates after accidents, and a crash in your car may be treated as a claim on your policy.
What if the person took my car without permission?
Your liability coverage generally does not cover a driver who lacked permission. Injured people then look to that driver’s own coverage and their uninsured motorist benefits.
Can I sue a relative who caused my injuries?
You can make a claim, which is usually paid by insurance. If you were a non-paying passenger related to the driver within the second degree, the guest rule limits recovery to intentional or heedless and reckless conduct.
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