In California, if you let someone borrow your car, you are also essentially lending that person your car insurance, as car insurance generally follows the car and not the driver. Even if the friend who is borrowing your car has his/her own fully-loaded auto insurance, your car insurance will be responsible for covering the damages if your car is involved in an accident.
Generally speaking, as long as your friend is a person who is not specifically excluded on your auto insurance policy, and as long as your policy has collision and/or liability coverage, your car insurance provides the primary coverage if your friend gets into a car accident while driving your car. This means that your friend's car insurance would provide secondary coverage, which would step in if you reach your policy limits. Your friend's car insurance may also cover some of the personal injury or medical expenses.
Your friend is at fault
If your friend causes a car accident while driving your car, you will have to file a claim with your insurance provider. Either you or your friend will have to pay the deductible in order to get your car fixed, but that is between the two of you to decide. Unfortunately, your insurance premium rates will likely increase as well.
Your friend is not at fault
If your friend gets into an auto accident while behind the wheel of your car but is not at fault, your insurance premium rates should not increase. In that case, you would file claim with the at-fault party's insurance provider, which will cover any damages to your car. An experienced auto accident lawyer can explain in further detail.
If someone has your permission to drive your car, that means in most cases, the person would be covered by your insurance provider, whether the person is your spouse, a family member who lives with you, a dependent child who moved out of the house, a babysitter, a friend, or any other permitted driver.
If you have not given permission for someone to drive your car (for example, a thief), you are not liable for damages caused to other vehicles and property. However, unfortunately, you may have to file a claim with your insurance provider to cover the damages to your car.
If a friend or relative borrowed your car without your permission, that person's car insurance would provide primary coverage in that case. This would make your car insurance the secondary coverage. However, there often needs to be some express denial of permission for your car insurance provider to accept that the person truly did not have your permission to drive your car.