I lent my minivan to a friend so he could transport a desk that he had bought. Unfortunately, he got into an accident on his way home from the store -- he hit a curb and caused $4,000 of damage to the front end of my car. Now, to make matters worse, my insurance company says the accident goes on MY driving record, and my insurance rates will go up as a result. That isn't fair! Since he caused the damage, why doesn't it go on HIS insurance policy? -- Bummed Out

Dear Frustrated:

When William Shakespeare advised, "Neither a borrower nor a lender be," he could have been talking about automobiles. Unfortunately, you have learned the hard way that, when you lend your car, you also lend your insurance. If anyone to whom you gave permission to drive your car causes an accident, you, as the owner, are responsible.

And any time there is an at-fault accident on your policy -- regardless of who was driving at the time of the accident -- your insurance premium will usually go up as a result.

However, there is one solution to this sticky situation. If you drive someone else's car regularly, or if you have occasion to rent a car, ask your insurance provider to add a "27 endorsement" to your auto policy. This extension covers legal liability for damage to non-owned automobiles, all for the princely sum of about $25 a year.

Let's say you borrow your generous neighbour's car on a regular basis to drive to night school. If you were to cause damage to her car for which you were liable, the 27 endorsement would kick in and pay for it, rather than your neighbour having to take the rap, as you did. Even if you use her car only now and then, you may still want to have the 27 endorsement, just in case.

While the 27 endorsement provides peace of mind to borrowers and lenders alike, it really pays its way when it comes to car rentals. Normally, the rental company will ask you to fork over anywhere from $12-15 a day for collision insurance -- referred to as the "collision damage waiver." With the 27 endorsement, however, you can safely refuse the rental company's insurance and pocket some extra cash.

Remember, your 27 endorsement comes into play only if you are legally liable for the damage. Otherwise, the other party's insurer pays.

So the next time your friend asks if he can borrow your car, ask to see his "27" first. Or, better yet, JUST SAY NO!

Note: Remember, policies vary, so when in doubt, consult your insurance representative.