Alabama Insurance Adjuster Practice Exam

Who will be primarily held liable for damages if Nancy and Drew borrow Joe's car and get into an accident?

1. Joe's liability insurance

2. Drew's liability insurance

3. Nancy's liability insurance

4. Their personal auto policies

The correct answer is: Joe's liability insurance

In the scenario where Nancy and Drew borrow Joe's car and get into an accident, Joe's liability insurance will primarily be held liable for damages. This is because the car's owner, Joe, has an insurance policy that typically covers liabilities arising from the use of his vehicle. When someone borrows a car, the lender's insurance generally provides coverage for accidents that occur while the borrower is using the vehicle. Joe's liability insurance is designed to cover damages caused to third parties, such as other vehicles, property, or injuries resulting from an accident involving his car. Therefore, in this case, if Nancy and Drew were to cause damages in the accident while using Joe's car, Joe's policy would be the primary source of coverage for those damages. While Drew's and Nancy's personal auto policies may come into play, particularly if Joe's coverage is insufficient to cover the full extent of the damages, they would not be the first line of liability in this situation. It is the car owner's insurance that primarily bears the responsibility in the event of an accident involving someone else driving their vehicle.