You lend your car to a friend who holds a valid licence. Your friend runs a red light and hits another vehicle. Whose insurance responds first?

Why D is correct

Motor vehicle liability insurance attaches to the vehicle. That is why lending a car is a far bigger decision than lending anything else you own: your policy answers first for harm your borrower causes, your claims record absorbs it, and your renewal reflects it. The borrower's own policy sits behind yours and responds only once its limits are exhausted. There are exclusions worth knowing about beforehand rather than afterwards, including drivers your policy names as excluded and household members who are not listed on it.

Why the other options are wrong

A. Your friend's policy, because your friend was the one driving

Putting the driver's policy first gets the order backwards. If the borrower's insurer contributes anything, it does so after yours, because the loss was caused by your insured vehicle.

B. Neither policy, since only the registered owner may be behind the wheel

Registered ownership governs who must keep the car insured, not who may physically drive it. Borrowers holding a valid licence are permitted drivers under the great majority of policies.

C. Both policies split the loss equally, whatever the limits are

Nothing divides a loss equally by default. Insurers respond in a fixed order against fixed limits, and assuming otherwise is how people learn they are personally exposed.

On the road

Someone lends their car for an errand, the borrower misses a stop sign, and the owner's renewal arrives with a larger number on it. The friend apologises. The premium followed the car rather than the apology, and so did the claims history that follows it into every future quote. Lending a car means lending something still attached to your own financial record.

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