Your friend’s car is in the shop, and they just need a ride for a couple of days, so you hand over your keys to help them out. Then your phone rings, there’s been an accident, and now you’re wondering if you are the one on the hook. In this article, we’ll walk you through who pays, what your insurance really covers, and how Arizona law handles these tricky situations.
Can Someone Else Legally Drive Your Car in Arizona?
Yes, Arizona law does allow you to let someone else drive your car, but only under certain conditions. The person behind the wheel must have a valid driver’s license, and you need to have given them clear permission to use the vehicle, that is what insurers call “permissive use.” If they’re an excluded driver on your policy or live with you but aren’t listed on your coverage, that could lead to major problems when a claim is filed. But even if it’s legal to let someone else drive your car, the real question most people face after an accident is this: whose insurance pays?
Does Insurance Follow the Car or the Driver in Arizona?
In Arizona, car insurance stays with the car. This system ties back to Arizona’s “permissive use” rule. When you give someone permission to drive your car, your coverage stays attached to it, no matter who’s driving. That means if your friend crashes while driving your vehicle, your insurance will usually step in first, even if they have their own policy.
Let’s say your policy has a $300,000 liability limit, and the crash causes $400,000 in damage, including injuries to the other party. Your policy would pay up to its limit, and then, if your friend has their own coverage, their insurer might cover the remaining $100,000. So your friend’s insurance is considered secondary, if it applies. But if they’re uninsured, underinsured, or excluded from coverage, it may not help at all. Moreover, your insurance company might still deny coverage depending on who the driver is and how your policy is written.
Another thing is, most people don’t realize how quickly damage can add up while the state minimums aren’t nearly enough in a serious crash.
What If the Damages Go Beyond Your Policy?
Arizona law sets minimum insurance requirements, but these minimums often fall short in real-world crashes:
- $25,000 per person for bodily injury
- $50,000 total per accident (if more than one person is hurt)
- $15,000 for property damage
These numbers may sound decent until you’re looking at hospital bills, physical therapy, or vehicle replacements. In a moderate crash, those costs can skyrocket past your policy limits. And once they do, any unpaid amount can become your responsibility, or your friend’s. Let’s look at how this plays out depending on who was at fault.
Case #1: Your Friend Is at Fault
If your friend caused the crash, your insurance will pay first, up to your policy limits. After that, any remaining costs can trigger a lawsuit. Arizona law allows the injured party to go after either the driver, the car owner, or both.
Let’s say your liability coverage tops out at $50,000 per person, but someone ends up with $150,000 in medical bills. Your insurance covers $50,000. The remaining $100,000? That could come from your friend or from you. If your friend doesn’t have their own auto policy or enough personal assets, the court may look to your income, savings, or property.
There’s also negligent entrustment. If you knew, or should’ve known, that your friend was unsafe (unlicensed, had a DUI history, or a poor driving record) and you handed over the keys anyway, the court could hold you directly responsible for letting them drive.
Case #2: Your Friend Is Not at Fault
Now flip the situation. Your friend is hit by another driver while using your car, and the crash wasn’t their fault. In this case, the at-fault driver’s insurance is responsible for covering the damages. But if they’re uninsured, underinsured, or dispute liability, your own uninsured/underinsured motorist (UM/UIM) coverage may come into play, if you have it.
But even when your friend isn’t at fault, your car is still the one damaged, and your policy may still end up handling parts of the claim, especially if the other driver’s insurer is slow or refuses to pay.
But even when the immediate costs are handled, the financial consequences often keep piling on, especially when it comes to your own insurance premiums.
What Happens to Your Rates and Coverage?
Even if your friend caused the crash, your insurance takes the hit. You could also lose accident-free discounts or even face non-renewal.
Claims stay on your record for years, and future claims may be treated with more scrutiny. In Arizona, where rates are already rising, one borrowed-car crash can cost you far more than a deductible. It’s not just a favor; it can turn into a long-term financial hit. And claim handling in these situations is often more complicated than a standard insurance claim.
How to File a Claim if You Let Someone Else Drive Your Car and They Crash It
When someone borrows your car and gets into an accident, you’re still the one who has to deal with the insurance claim. In Arizona, because coverage typically follows the vehicle, not the person, your policy is the one most insurers will look at first. Here’s how to handle the claim process step by step:
Step 1: Notify Your Insurance Company Immediately
Call your insurer as soon as you hear about the crash. Waiting too long can delay the claim or give them a reason to deny it altogether.
Step 2: Confirm the Driver Had Permission
Your insurer will ask if the person had your permission to drive the car. This is crucial for “permissive use” to apply and for your coverage to be valid.
Step 3: Get the Police Report
If law enforcement responded, get a copy of the report. It includes important details like who was driving, who may be at fault, and whether any citations were issued.
Step 4: Collect and Save All Documentation
Photos from the scene, medical bills, repair estimates, and witness info can all strengthen your claim. Keep everything in one place in case the insurer asks for more details.
Step 5: Cooperate, But Don’t Admit Fault
Answer your insurer’s questions honestly, but don’t assume blame. Let the facts and report speak for themselves.
Step 6: Watch for Delays or Denials
If the driver isn’t listed on your policy, or if they’re a household member you didn’t disclose, the insurer may delay or deny the claim. Be prepared to push back or get legal help if needed.
Accidents like these are never simple, but taking the right steps from day one can protect your rights and your finances.
If someone borrowed your car and caused an accident, and now you’re stuck in the middle of insurance headaches or worse, you’re not alone. At Esquire Law, we’ve helped countless Arizona drivers deal with this exact situation, from denied claims to lawsuits over damages that exceeded policy limits. Our car accident lawyers understand how Arizona insurance laws really work, and we know how to push back when insurers try to avoid paying. If you’re feeling overwhelmed or unsure what to do next, let us step in, protect your rights, and fight to limit your financial exposure. Let’s talk about what happened and how we can help.