In most car accident scenarios, the drivers involved own their respective vehicles, and issues of financial responsibility and insurance coverage are fairly straightforward. But what if you're involved in a car accident with someone who doesn't own the vehicle they're driving? Or what if you lend someone your car and they cause an accident? Read on for the answers to these questions and more.
The law holds employers responsible for most wrongful but 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" (the losses incurred by those who suffered injury or property damage because of your employee's negligence.)
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).
If the car-borrower has his or her own car insurance coverage, there can be gray areas in terms of which policy applies. And if 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, your insurance company might take issue if you try to make a claim.
Always check the fine print of your policy to understand how your coverage will (or won't) apply in these situations. Learn more about what drivers and vehicles are covered under a car insurance policy.
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).
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, dad or mom) 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 signs the application, the parent 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 licensed or not) and the minor ends up causing a car accident. Learn more about parents' liability for teen drivers.
If you lend your car to an incompetent, reckless, or unfit driver, and that driver, through his or her negligent driving, causes a car accident, you might be liable for injuries and damage resulting from the accident.
In this kind of "negligent entrustment" case, the plaintiff (the person bringing the lawsuit) must prove that the car owner knew, or should have known, that the driver was incompetent at the time that permission was given.
Lending your car to the following types of people can mean you have committed negligent entrustment, and you could be liable for any damages caused by the driver:
When someone causes a car accident while driving a vehicle owned by someone else, it can raise thorny issues of financial responsibility. It might make sense to get advice that's tailored to your situation. Learn more about how a car accident lawyer can help.