Financial Channel

I was out of town on a business trip. I told a friend she could borrow my car only in the event of an emergency. She drove it to work several times and to visit an ex boyfriend. She drove it out in the country, in deep mud, and wrecked it into a tree. I had no insurance on the vehicle; however, she had full coverage on her vehicle which was in the shop. Should/will her insurance cover it? Also, it's going to cost more to fix my car than it was actually worth. Is she responsible in anyway, and if so, is she liable to give me the replacement value of the car or to fix the damages she caused?

I don't know about your friend's insurance company, but if I had borrowed your car and wrecked it, my insurance company would cover your uninsured vehicle -- if I have "collision" coverage on my own vehicle (neither liability nor comprehensive cover the "one car" accident).

It's actually a sticky question, since "primary" responsibility falls on the owner of the car. Your friend's insurance coverage extension to unowned vehicles is considered "secondary" coverage. In other words it kicks in, if YOUR coverage is inadequate. Some companies treat this an "augmentation" coverage, not "replacement" coverage, meaning, if you don't have coverage on your own car, neither do they.

Her liability policy automatically covers any damage to other property or persons, but not the car being driven.

Also note that she could still get a ticket for driving a vehicle that does not have insurance coverage -- whether she was aware of that fact or not.

So, the answer to your question is that her insurance company MIGHT cover your car -- it won't hurt to file a claim. Is she responsible, if her insurance company refuses payment? That probably depends on the laws in your state. But I would GUESS that she is NOT, since you gave her permission to drive your car, knowing it didn't have insurance. But an attorney in Indiana should be able to answer that question.

However, some people would feel morally responsible regardless of the law.

Yould imply that you rented the car to her, maybe the insurance company covers that. Alternately, your homeowners insurance might cover the car or other property even if it is not on your property, especially if it was taken without your permission. This is stretching things a bit, as you stated you gave her permission, but only in an emergency, which it wasn't.

Personal auto insurance policies often contain an exclusion for situations where the car owner rents the car out - so check the language before going that route. (Also, even if the other driver has collision coverage that is otherwise applicable, the other driver's insurance policy may also contain a provision denying coverage if she took your car without permission.) Homeowner's policies typically exclude auto-related damages and injuries. So it is important to check the language of the insurance policies under which claims might be made.

she drove your vehicle and wrecked it. She is responsible whether her insurance company pays or not. You can demand the lesser of the cost of repairs or value of the vehicle.