Daughter lends car; driver has fender-bender

by Lori
(Virginia)

Our daughter lent her car to her friend while at college (VA). Her friend was backing out of a parking spot at the library and was hit in the rear bumper by another driver.

The campus police responded, and no ticket was issued, and "minimal damage" was reported, with insurance information from both vehicles being exchanged.

Our car suffered a dented/cracked bumper (2003 Honda Civic EX 4-door) and the other car suffered scratches and dented hub cap (Volkswagon Jetta - year unknown at this point). The officer reported the Jetta's damage estimate to be about $400, and her friend that was driving stated that the damage reported on our car was higher than the others.

We have obtained an estimate to replace the bumper on our Honda of $503 from a family friend. My daughter's friend has offered to pay for the damages to her car since she was driving, but now only wants to pay our deductible of $250.

We have talked to our insurance agent, and he has suggested that we obtain an estimate and then decide on the claim. We do not have any claims on file with the insurance company...this is our first experience, and it happened with someone who is not on our policy.

Our agent told us that our rates would probably increase 5% with a claim. We have insurance with Farm Bureau in Virginia. We want to do what is right, what will cover our interests, and what will be the best for all those involved.

My questions are these:

Should we file an official report with the insurance company and let our insurance take care of the claim?

Should we obtain the driver's (our daughter's friend's) insurance information? Should we contact the other driver of the other damaged vehicle and find out if she is planning on filing a claim?

What else should we do to cover our liability?

What is the extent of the driver's liability?


Answer:

Should we file an official report with the insurance company and let our insurance take care of the claim?

The answer is depends. If your rates will increase, and the damage to your vehicle is not that much, then you are probably better off by fixing your car out of pocket. If the damage is considerable, then the rate increase might not be a strong enough reason to discourage you from filing a claim.

Remember, insurance agents are not "100%" reliable. They have a vested interest in discouraging you from filing claims. Their bonuses and salaries from insurance companies are correlated with their "policy to claim" ratio. The more policies they sell the better. However, the more policies they sell with no claims at all, then it is even more profitable.

If you know your agent and you know that this person is honest and telling you the truth and putting you interest before theirs, then you can take their advice at face value.

Should we obtain the driver's (our daughter's friend's) insurance information?

You can, however insurance follows the car. Meaning, that your insurance company is actually insuring the driver of you car (unless the driver is specifically excluded from the policy). If the driver is liable, then it is the policy of the car that would cover her.

Her policy will only cover her after all your coverages are exhausted in your car's policy. The car policy is primary, and her policy will be secondary.

Sounds like your policy has enough coverage for the damages, so you probably will never need to go after her policy. Note: this is not a voluntary thing. This is how insurance contracts work and you are probably bound by it. Your policy must pay for the damage if you want insurance involved.

What else should we do to cover our liability?

At this point nothing. You should never lend your car for this reason. Sounds like the driver was backing, usually the backing driver is 100% at fault.

If you believe that she is not at fault even though she was backing, then make sure the claims adjuster is really doing a good investigation and getting to the bottom of things. Usually, they call fault against you just because you are backing. However, they must really investigate everything before making a call.

What is the extent of the driver's liability?

Again, if she is at fault for the damages, your insurance would have to pay because she is an insured under your insurance policy that would be responsible for damages. Note that coverage will be granted to her under the collision coverage, which is subject to the deductible.

Good Luck.