Am I Covered if I Get into a Car Crash During a Test Drive?

test driving a vehicleTest driving a vehicle is the best way to determine if it is right for you. However, what if you are involved in a car crash during a test drive? What if you or someone else is injured in the crash? Is the car dealership responsible for covering the damages? What if you do not have your own auto policy?

These are all valid questions to ask and know the answers to before heading to the car dealership and doing a test drive. At Greg Monforton & Partners, our vehicle accident lawyers in Windsor are ready to help. Learn more about your rights and available legal options during a free, no-obligation consultation.

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Insurance Coverage for Car Dealerships

In the event of a car crash during a test drive, the car dealership is generally responsible for any physical damage to the vehicle. The car dealership owns the vehicle, so they have an interest in it.

The purpose of auto insurance is to help protect your investment in a vehicle. When you let someone borrow your vehicle, you are also letting them use your insurance. When someone is in a car crash while test driving a vehicle, the car dealership’s insurance is liable for the damage to the vehicle.

Garage liability insurance is a huge, but necessary expense for car dealerships. This type of insurance is not just for owners of vehicle repair shops or garages. It covers third-party bodily injury and property damage.

The Ontario Garage Automobile Policy provides coverage for the inherent risks of the day-to-day operations of a car dealership’s business. This includes the possibility of damage to vehicles.

One condition of garage policies is that the insured (in this case the car dealership) should not allow anyone to drive or operate a vehicle in their possession unless that individual is legally allowed to.

Approximately 80 per cent of car dealerships require a valid licence to test drive a vehicle. Without checking for a valid licence, the test driver may or may not have insurance coverage or an auto policy.

Statutory Accident Benefits in Ontario

Car dealerships are also obligated to have insurance coverage for Statutory Accident Benefits. This coverage protects a driver or someone else if a car crash causes injuries during a test drive – even if the test driver is at fault.

It is important to note, however, that if the test driver has his or her own auto policy, Statutory Accident Benefits are paid by the driver’s insurance. If the test driver did not have insurance when involved in a car crash with the vehicle, the car dealerships’ insurance will pay out Statutory Accident Benefits.

What if I Signed a Liability Waiver?

Sometimes car dealerships may try to mitigate their responsibility by having test drivers sign a liability waiver. These waivers are an attempt to transfer any and all liability for damages to the test driver. Other car dealerships may not ask to sign these waivers because they think it discourages individuals from test-driving vehicles. In Ontario, test drive waivers are not very common.

Courts may deem waivers as valid and enforceable in certain situations. The validity of a liability waiver will depend on the specific wording used and the circumstances under which the waiver was signed.

You should not sign a liability waiver unless you completely understand the terms and are comfortable with the risks involved in test driving a vehicle.

Injured in a Car Crash? Contact Our Firm

If you or a loved one has been injured in a car crash, our lawyers are here to help. We have represented many car crash victims throughout Ontario for decades, recovering millions on their behalf. We offer an initial consultation to discuss your situation at no cost to you. There is no obligation afterward to hire us.

We also work on a contingency fee basis, which means there are zero upfront fees. You only pay us for the services we provide if we are successful in getting compensation for you.

Call (866) 320-4770 for a Free Case Review.