What Happens When Someone Else Gets in an Accident in Your Car

The car insurance coverage picture and potential liability rules when a driver causes an accident in someone else's vehicle.

Updated by , J.D.
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  • In most car accident scenarios, the drivers involved are operating their own vehicles, and issues of insurance coverage and legal responsibility for the crash are fairly straightforward.

    But what if you're involved in a car accident with a driver who is behind the wheel of someone else's vehicle? Or what if you've lent your car to someone and they cause a crash? Here's what to know:

    • If someone borrows your car, they're typically covered under your car insurance policy, but if they cause an accident, they (not you) are usually at fault in the eyes of the law.
    • When an employee who is "on the clock" is involved in a car accident, the employer is likely on the financial and legal hook.
    • In relatively rare situations, it's possible for a vehicle owner to be deemed "negligent" when they loan their vehicle to someone and an accident results. That means the vehicle owner could be on the legal hook for any resulting harm, even if they weren't in the car at the time of the crash.

    Car Accident Insurance Coverage Versus Legal Responsibility for a Crash

    This article will need to cover a fair amount of ground when it comes to a vehicle owner's potential liability when loaning their car to someone else. At the outset, it's important to understand that there's a big and important distinction between:

    • whether someone else might be covered under your car insurance policy if they're involved in a car accident while driving your car, and
    • whether you yourself are potentially responsible for car accident injuries and other harm when someone causes an accident while driving your car.

    We'll thread this distinction throughout the discussion in this article, but the nutshell version is this: If someone borrows your car with permission from you, they're usually considered a covered driver under your car insurance policy if they get into an accident, but even if the car-borrower caused the crash, they (not you) are typically considered at legal fault.

    What If Someone Borrows My Car and Causes an Accident?

    It's perfectly legal to loan your car to someone, and as long as you've given that person permission to drive your vehicle, your car insurance should cover them if they cause an accident (assuming they're not specifically excluded from your policy). In car insurance-speak, this is known as "permissive use" coverage, and it essentially means that the policyholder's insurance transfers over to someone who has permission to use the covered vehicle, so that the car-borrower stands in the shoes of the policyholder when the vehicle is involved in an accident.

    After all, when a car accident happens, car insurance coverage is meant to absorb the financial impact of resulting losses, including injuries and vehicle damage. So, depending on the wide range of potential crash scenarios and corresponding car insurance coverage possibilities, when someone borrows your car and gets into a car accident:

    Those aren't all the possibilities, just a few of the most common. Always check the fine print of your policy to understand how your coverage will (or won't) apply if someone borrows your vehicle. Learn more about what drivers and vehicles are covered under a car insurance policy.

    A few more things to keep in mind:

    • If the car-borrower has their own car insurance coverage, this can complicate things, and it's not automatic that your insurance will apply to cover an accident. The two insurance companies will need to figure out whose coverage applies, based on the policies and the circumstances.
    • If someone (like a family member who lives with you) borrows your car on a regular basis, but they're not a named driver on your policy when they probably should be, this could create insurance coverage problems down the proverbial road. Your insurance company might take issue if that person is involved in an accident while driving your car, and they to make a claim under your policy. This could lead to a claim denial or other complications.
    • If someone borrows your car without permission, your car insurance policy almost certainly won't apply to any accident that results from that use.

    If Someone Borrows Your Car and Causes an Accident, They (Not You) Are Usually At Fault for the Accident

    This is where it's crucial to understand the difference between insurance coverage for a car accident, and ultimate legal responsibility for that accident.

    Let's say you let someone borrow your car, and they cause a serious accident. The other driver and a passenger in the other vehicle suffer significant injuries, and the vehicle they were in is declared a "total loss" for post-crash valuation purposes. In this scenario, your liability car insurance coverage will apply to:

    • the injuries suffered by the other driver and their passenger, and
    • the damage to (and the cost to replace) the other driver's vehicle.

    But once the limits of your liability coverage are exceeded (which is quite possible if the accident was serious enough), the person who borrowed your car is now personally on the legal and financial hook for any losses that remain. You bear no personal legal responsibility for the accident, in other words. Bottom line: Having your car insurance policy apply to an accident is not the same thing as bearing legal responsibility for that accident.

    There are a few rare situations in which a vehicle owner might be found legally responsible (in whole or in part) when someone borrows their car and causes an accident.

    Insurance Aside, Can I Ever Be Legally Liable for Another Person's Driving?

    Now let's put the car insurance coverage issue (mostly) aside and tackle the question of when you yourself might be considered careless in the eyes of the law—and therefore legally at fault, in whole or in part—for injuries, vehicle damage, and other losses when someone causes a car accident while driving your car.

    Let's look at some situations in which this kind of liability might arise.

    When Your "On the Clock" Employee Causes a Crash

    The law holds employers responsible for most wrongful unintentional acts (including negligent driving) committed by an employee who is performing job duties at the time.

    For example, if your employee runs a red light and hits another car while driving the company vehicle during work hours, you will probably be responsible for the "damages" (including injuries and property damage of others who were harmed because of your employee's negligence). In this situation, liability for the accident means both of the following:

    • your company's commercial liability insurance policy (or car insurance policy) would apply to the car accident, since it was your employee's fault, and they were performing their job duties at the time, and
    • your company would be on the financial hook if for some reason the insurance policy was found not to apply to the accident, or if the injured person's damages exceed the limits of your company's available insurance coverage.

    Let's say Darrell is employed by ABC Bread Company, delivering bread to various stores most weekday mornings. On the route, he rear-ends Maria, injuring her and damaging her car. ABC Bread Company will likely be responsible for Darrell's actions, because at the time of the accident Darrell was carrying out his job responsibilities (making a delivery).

    If the accident had occurred when Darrell drove the delivery truck to Las Vegas with his buddies for the weekend, ABC Company would probably not be legally liable for Darrell's actions, and ABC's insurance likely wouldn't apply to the accident (since Darrell likely didn't have company permission to take the truck on a road trip).

    When Your Kid Borrows Your Car

    In many states, parents are liable for a child's negligent driving in the family car. There are several types of laws and legal theories that could apply here.

    Negligent entrustment. If a parent lends the family car to a minor child knowing the child is incompetent, reckless, or inexperienced, the parent may be liable for damages resulting from the child's driving. This legal theory is called negligent entrustment (see "When You Let an Incompetent or Unfit Driver Use Your Car," below, for more on this concept).

    The "family purpose" doctrine. Some states have adopted the "family purpose" doctrine: when someone purchases and maintains a car for general family use, the owner of that vehicle (generally, a parent or guardian) is liable for negligent driving by any family member using the car.

    Signing a minor's driver's license application. Some states have laws that make the person who signs a minor's driver's license application legally responsible for the minor's negligent driving. So, if a parent or guardian signs the application, that parent or guardian will be liable for the child's negligent driving.

    For example, in California, where a parent or legal guardian must sign a driver's license application for any minor who is under 18, California Vehicle Code section 17707 essentially holds that parent or guardian jointly liable if the minor causes a car accident. And California Vehicle Code section 17708 says that a parent can be held civilly liable for all foreseeable damages if they give express or implied permission for a minor to drive a vehicle (whether the minor is licensed or not) and the minor ends up causing a car accident. Learn more about parents' liability for teen drivers.

    When You Let an Incompetent or Unfit Driver Use Your Car

    If you lend your car to an incompetent, reckless, or unfit driver, and they cause an accident as a result of their negligent driving, you might be liable for injuries and property damage resulting from the accident. But in this variation of a "negligent entrustment" case, the plaintiff (the person bringing the lawsuit) must prove that the car owner knew—or should have known based on the circumstances—that the driver was incompetent at the time that permission was given.

    When is a Driver Incompetent, Reckless, or Unfit?

    Lending your car to someone in any of the following situations can place you on the legal hook for negligent entrustment, and you could be liable for any damages caused by the driver if they cause an accident:

    • someone who is drunk, or who is likely to become drunk
    • a minor not old enough to legally drive
    • an inexperienced driver (such as a minor with only a learner's permit) who is driving your car without supervision
    • someone whose advanced age likely makes them unfit to drive
    • someone who suffers from an illness that affects their driving—for example, a person who often suffers seizures, even while taking prescribed medication—could constitute negligent entrustment, or
    • someone who you know has a history of reckless driving.

    Getting Help After an Accident Involving a Borrowed Vehicle

    When one person causes a car accident while driving a vehicle that's owned by someone else, it can raise thorny issues of insurance coverage and ultimate financial responsibility. Especially if you've suffered serious injuries in an accident where the at-fault driver was operating someone else's vehicle, it might make sense to discuss your situation with a legal professional. An experienced car accident lawyer will explore all insurance coverage and liability options and navigate the right course to a fair recovery.

    On the other side of things, if you loaned your car out to someone who caused a car accident, a consultation with an experienced attorney can help you understand your potential liability under your state's laws, and figure out how to best protect yourself.

    Learn more about how a car accident lawyer can help. You can also use the tools on this page to connect with an injury lawyer in your area.

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