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Insurance for Borrowed Cars: Who’s Liable in an Accident?

You lend your car to a friend or family member, thinking it’s just a simple favor. But what if they get into an accident?

Who’s responsible, and does insurance cover borrowed cars in New Jersey? Processing through the road of borrowed cars raises important questions about liability, especially in the event of an accident.

In this comprehensive guide, we’ll uncover the complexities of borrowed car accidents, insurance rules, and what steps you need to take if your borrowed car meets an unfortunate collision.


Does insurance cover Borrowed Cars in New Jersey?

When your friend borrows your car in the Garden State, the responsibility isn’t as clear-cut as it might seem. Here’s what you need to know about insurance coverage for borrowed cars:

Primary Insurance 

Consider the primary insurance held by your friend. If they have their car insurance, it often extends to cover borrowed cars, though the extent of coverage may vary.

It’s crucial to clarify the terms and limitations of their policy concerning borrowed vehicles.

Secondary Coverage

In cases where your friend’s insurance falls short or is insufficient to cover the damages, your auto insurance may come into play as secondary coverage.

However, the applicability of this secondary coverage is uncertain on the specifics of your policy. 

Different insurance policies may have varying rules regarding coverage for borrowed cars, so it’s imperative to thoroughly review the details of your policy.

Liability Matters

Furthermore, understanding liability is key in New Jersey, as the state operates under a no-fault insurance system.

This means that your Personal Injury Protection (PIP) covers medical expenses, irrespective of who is at fault in the accident. 

However, when it comes to property damage, liability depends on determining fault. It’s important to establish fault correctly to process the claims process effectively.

What should I do if my friend Borrowed my car and Got an Accident in NJ?

Accidents happen, and when they involve borrowed cars, it adds another layer of complexity. Here’s a step-by-step guide on what to do if your friend has an accident in your car:

  1. Ensure Safety: Prioritize safety first. Make sure everyone involved is safe, and if necessary, seek medical attention.
  2. Contact the Authorities: Call the police to report the accident. This step is crucial for insurance claims and legal purposes.
  3. Exchange Information: Collect details from everyone involved, including names, contact information, insurance details, and license plate numbers.
  4. Document the Scene: Take pictures of the accident scene, damages, and any relevant road signs or signals. This documentation can be valuable for insurance claims.
  5. Notify Your Insurance Company: Inform your insurance company about the accident as soon as possible, even if your friend was driving. Provide all the necessary details and let them guide you through the process.
  6. Consider Legal Advice: If the accident leads to legal complications or disputes, consulting with a car accident attorney in New Jersey can be beneficial.

See also: Who Pays if a Friend Crashes My Car in NJ

Insurance Company Rules and Regulations on Borrowed Car Accidents

Understanding the rules and regulations imposed by insurance companies is crucial for going through the after-effects of a borrowed car accident in New Jersey. 

Here are some key points:

Permissive Use

Insurance companies generally provide coverage for accidents that occur while someone else is driving your car with your permission.

For example, if you lend your car to a friend for a weekend road trip and they have an accident during that time, your insurance is likely to cover the damages. 

However, it’s important to note that the extent of coverage can vary between policies, and some may have specific conditions or limitations.

Non-Permissive Use

Things become more complicated if your friend borrows your car without your explicit permission.

In such cases, insurance coverage becomes a gray area. Some insurance policies may still provide limited coverage, especially if the borrower is a family member or has borrowed the car on previous occasions.

On the other hand, certain policies may outright deny coverage for accidents that occur during non-permissive use. 

An example might be if a friend takes your car without asking and has an accident, the insurance company could question the legitimacy of the usage and coverage.

See also: How Does Insurance Affect A NJ Car Accident Case?

How can I insure a car under my parents’ name in NJ?

If you’re a young driver in New Jersey, insuring a car under your parents’ name might be a cost-effective solution. Here’s how you can go about it:

  1. Named Driver: You can be added as a named driver on your parents’ insurance policy. This means you’re covered when driving the insured car.
  2. Usage Limitations: Some insurance policies may have restrictions on how often and for what purposes a young driver can use the insured car. Be aware of these limitations to avoid potential coverage issues.
  3. Good Student Discounts: If you’re a student with good grades, inquire about potential discounts offered by insurance companies. Many insurers provide discounts for students who maintain a high GPA.

Call a Car Accident Attorney in New Jersey

Handling the complexities of borrowed car accidents requires a comprehensive understanding of insurance policies and legal implications.

For those facing legal uncertainties or disputes post-accident, seek advice from an experienced car accident attorney in New Jersey.

Rosengard Law Firm stands out as a reliable resource, offering guidance and expertise in processing the intricate landscape of borrowed car accidents. 

Their team ensures you are well-equipped to handle legal complexities, providing a steady guide through the consequences of such unfortunate events.


What should I do if someone else drives my car without my permission?

If someone unauthorized drives your car, follow these steps, report to the police file a police report to document the unauthorized use, inform your insurance company, and notify your insurance company to document the unauthorized use.

How can I add Borrowed Cars to my insurance?

To add borrowed cars to your insurance: Contact your insurance company, provide details about the individuals who will be driving the borrowed cars, and understand any changes in coverage, or limitations associated with adding borrowed cars to your policy.


Handling the complexities of insurance for borrowed cars in New Jersey requires a clear understanding of policies, regulations, and legal considerations.

By following the steps outlined in this guide and staying informed about your insurance policy, you can reduce potential risks and ensure a smoother resolution in the unfortunate event of a borrowed car accident. 

Remember, safety and communication are paramount, and consulting with professionals, such as car accident attorneys, can provide invaluable assistance in challenging situations.

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