We know, we know -- you weren't behind the wheel! So how can your insurer penalize you for someone else's bad driving? Well, the truth is, your insurer's got nothing on you if your buddy steps up and pays for repairs himself. But if this pal of yours can't or won't pay, you'll have to file a claim with your insurance company. And once you file that claim, your rates will likely rise. Unfair, sure, but that's how the system works.
There is one silver lining. If you didn't give your friend permission to take your wheels in the first place, there's a good chance you won't be held liable for the damage. However, if the accident involved another vehicle, your car-nabbing buddy is uninsured and the resulting damage exceeds your policy limits, the owner of the other vehicle can approach you for medical expenses and any property damage [source: MSN Money]. The moral of the story: Choose your friends wisely. And, as Shakespeare wrote, neither a borrower nor a lender be.