There are many situations when letting someone borrow your car makes sense. Your sister’s car is in the shop. You have too many margaritas at happy hour and ask your sober friend to drive home. Your neighbor asks if he can run a quick errand.

But what happens if they get into a wreck in your car? Or you’re borrowing a car and have an accident? Does the driver’s insurance kick in or does the burden fall on the car owner’s coverage?

Here’s a look at what happens if you or someone else crashes a borrowed car, and how to ensure you’re always financially protected behind the wheel of someone else’s vehicle.

What happens if someone else crashes your car?

Letting someone borrow your car can be nerve-wracking. Not only are you letting the driver take your high-value item around town, your car insurance policy comes into play too. Under the concept of “permissive use,” if you give permission for a valid driver to borrow your vehicle, your policy still covers your car.

But there are some key nuances.

If someone else drives and wrecks your car, but they are not at fault, the other driver’s liability coverage will cover the property damage and bodily injury. If the at-fault driver doesn’t have enough coverage, your policy’s uninsured/underinsured motorist protection may be necessary to cover the difference.

If you lend your car to someone who is at-fault in an accident, though, your own auto insurance coverage will apply. Any resulting property damage or injuries will be covered by your insurance company, up to your policy’s coverage limits.

It’s important to read the fine print of your policy documents, to ensure that you understand your carrier’s permissive use policies and exactly what they cover.

Who pays the deductible?

If you have collision coverage on your vehicle, in the event a friend or family member wrecks your car, it will pay to repair or replace your vehicle. If you’re the at-fault party, you will still be responsible for paying any applicable deductible for the repairs, though.

So, who actually pays the deductible, if you weren’t technically driving your car in the first place? Well, this is where things get a bit gray.

In most cases, you and your friend will need to talk to decide who pays. If your friend refuses, or can’t afford the deductible, you may have to foot the bill in order to get your car repaired. Your carrier may choose to go after your friend’s auto insurance policy for costs that exceed your policy limits, but they don’t typically recover your deductible for you.

What if you don’t have enough coverage?

If your liability from an at-fault accident exceeds your policy limits — even if a friend was driving — you may find yourself in a sticky situation.

First, the borrower’s own insurance coverage may be tapped to provide secondary coverage, depending on your state and the specifics of the accident. If you have an umbrella policy or other personal liability policy, that coverage may also be utilized to cover the not-at-fault driver’s damages.

If your coverage still isn’t enough, you could be personally liable for the expenses beyond your policy limits.

Will your insurance cover someone not on your policy?

If you let a loved one borrow your car and that person gets into an accident, your carrier will usually cover the loss even if that individual wasn’t on your policy. There are a few exceptions, though:

• If there wasn’t permissive use: Your carrier may deny insurance claims for a car accident if someone borrowed your vehicle without your explicit permission, i.e., non-permissive use.

• If the driver wasn’t legally licensed or was impaired: As the owner of the vehicle, it’s your responsibility not to lend it to someone without a valid driver’s license, whose license is suspended, or someone who is obviously impaired. If you do lend your vehicle to a reckless or illegal driver, your carrier may deny a resulting claim. So it may seem obvious, but you should think twice about handing your keys to anyone with a history of speeding tickets, drunk driving, DUIs or other black marks on their driving record.

• If the driver was listed as a named exclusion: You can list people on your policy as excluded drivers, meaning you are explicitly excluding them from your coverage. If an excluded driver uses your vehicle and gets in an accident, your carrier will not extend coverage.

If someone will be borrowing your vehicle regularly, you may want to add them as an authorized driver to your policy. This will ensure that they are always protected when using your car, and you never have to worry about whether coverage is provided.

What happens if you wreck a borrowed car?

In general, car insurance follows the car, not the driver. So, as long as you borrowed a car that has active and valid insurance coverage (including proof of insurance), you should be protected if you get in an accident. In most situations, primary coverage would be the policy of the car owner, not the driver.

If you’re at fault for wrecking a borrowed car, the vehicle owner’s insurance should provide liability coverage to the not-at-fault driver and also pay to fix the borrowed vehicle if collision insurance was added.

If you aren’t at fault for a wreck in a borrowed vehicle, the at-fault driver’s liability coverage should cover your injuries and any damage to the car you were driving.

When would your own insurance company have to pay?

If you get into an auto accident in a borrowed car, there is a chance that your own auto insurance policy may be required to provide secondary coverage if you’re found at-fault.

This typically only occurs if the vehicle owner doesn’t have sufficient coverage. In this case, your own coverage may be called on to cover damages that exceed the owner’s policy limits.

If you’re injured in the accident, your policy can also provide you with personal injury protection (PIP) and medical payments (Medpay) coverage in some cases, even if you’re driving a borrowed car.

How often do you borrow others’ cars?

Vehicle owners are allowed to lend out their car on occasion without penalty, as long as the driver they’re handing the keys to has a valid license and there’s no reason to believe they will be reckless. But such permissive use coverage is intended for occasional drivers.

If you regularly borrow a car from someone — such as sharing a family vehicle or driving your partner’s car on a daily basis — you may need to be added to their policy as an authorized driver.

Many carriers will require policyholders to add other drivers who live in the home, adult children or acquaintances who frequently drive the vehicle. If you wreck a borrowed vehicle and it’s discovered that you borrow that car all the time but are not added to the policy, the insurance carrier could potentially push back on the claim.

Consider your own policy

If you don’t own your own car, you may think you don’t need insurance coverage. However, if you regularly drive other people’s vehicles, you should seriously consider buying a non-owner auto insurance policy.

Non-owner car insurance provides you with liability coverage anytime you get behind the wheel of someone else’s car. It doesn’t include comprehensive or collision coverage — so any vehicle you borrow wouldn’t be covered by this policy — but is typically more affordable than a standard policy.

Depending on the carrier, you may also be able to add PIP, Medpay, and/or uninsured/underinsured motorist coverage to protect you if you’re injured in an accident.