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Auto Insurance Claims/Accident in borrowed vehicle

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Expert: - 9/9/2008


Question
I was riding a classmate's moped in a parking lot and when I stopped, I accidentally dropped it and it was scratched. My classmate is now saying that it is over a $1000 in damages. At first he was trying to say my insurance had to cover it. Now, he says that he will use his own insurance, but he wants me to pay him $500 for a deductible. I think the damages he is claiming are excessive. I know his insurance has to cover it, not mine. But am I required to pay the full deductible?

Answer
Hi Tiffany,

Based on your description, it sounds as though you were negligent in damaging the moped.  (If there were other  circumstances that might indicate you were not negligent, please let me know as this changes my answer)

Insurance follows the vehicle, so his insurance policy (for the moped) will cover the damages.

Technically, you are responsible for all of the damages since you caused it through negligence.  However, assuming you were operating the moped with the owner's permission, the insurance policy will consider you to be an "insured" under the policy, as a permissive user. (If you did not have permission, please let me know)  Since you are an "insured" the insurance company will not seek reimbursement from you for the amount they pay out, even if they consider you negligent.

However, you do not have an "insured" relationship with the owner.  He is free to pursue you for his out of pocket expenses, such as his deductible.  He could sue you in small claims court and would probably win.

Now, if you believe he is claiming unrelated damages that you did not cause, that is another matter.  If you believe that is the case, you'll need to be able to prove this in case he decides to sue you.

I suggest you try to work out an agreement with him regarding a fair amount for the deductible.

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Expertise

I am currently an Auto Claims Manager for a large insurance company. I have 18 years experience in the industry, having worked as a Claims Adjuster, Injury Settlement Negotiator, Claims Manager, SIU/Fraud Investigator, and Compliance Officer......I can answer questions related to any aspect of Automobile insurance claims and coverages. I can provide an inside look at how insurers operate. I always treat my customers fairly and want to help make sure you are treated fairly. However, please keep in mind that being treated fairly according to the law does not guarantee that you will get what you want. I can also answer some questions regarding Homeowner's and other types of insurance claims. I have handled all types of auto insurance claims and coverages. I am NOT an automotive repair expert but can give advice re how insurers handle complex repair issues. Please keep in mind that every state has its own set of laws pertaining to rules of the road, liability, and insurance. No one is an expert on every state. I am most familiar with laws in Maryland, DC, West Virginia, and Virginia, but will attempt to answer questions for other states. I am not an attorney an cannot provide legal advice. My advice will be my opinion based on my experience.

Experience

I am currently an Auto Claims Manager for a large insurance company. I have 18 years experience in the industry, having worked as a Claims Adjuster, Injury Settlement Negotiator, Claims Manager, SIU/Fraud Investigator, and Compliance Officer. I am not an attorney an cannot provide legal advice. My advice will be my opinion based on my experience.

Organizations
CPCU Society. Adjusters license in multiple states. International Association of Specal Investigators

Education/Credentials
I have a B.S. in Finance and have completed the AIC and CPCU designations.

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