Can I Be Liable If I Loan My Car to Someone and They Cause an Accident?

When you loan your car to a friend or family member, there is a risk that he or she could get into a car accident in Appleton. If it does happen, it is important to know whether you may be held liable for damages. There are multiple factors that may affect liability, and the amount paid out to cover damages.

Sigman Janssen discusses insurance coverage when loaning a car to a family member or friend and liability if a crash happens.

We have helped many accident victims pursue maximum compensation and recovered millions for our clients. This includes a recovery of $2 million for a young adult injured in a highway accident. An initial consultation with a member of our legal team is free and confidential.

Does Insurance Follow the Car or the Driver in Appleton, Wisconsin?

When lending someone your car, you are also lending him or her your auto insurance. This is because most insurance policies follow the car, not the driver.

In the event of an accident, your auto insurance would act as primary coverage. This is true even if the driver has insurance. If you let a friend borrow your car and he or she causes an accident, your auto insurer would be responsible for paying for damages to the other driver and his or her passengers, up to the limits of your policy. If damages exceed your policy limits, your friend’s insurance would act as secondary coverage.

If your friend is not to blame for the accident, the other driver’s insurance would be expected to pay for any damages caused. This is the standard procedure in at-fault insurance states.

Auto Insurance Coverage and Permissive Use

Generally, anyone living in your household will be covered by your auto insurance. This could also include anyone who borrows your car, provided you gave him or her permission. This is in accordance with state law. Permissive use means giving a friend or family member consent to drive your car. In some instances, an adult resident of your household can give himself or herself permission to operate your vehicle and be covered by your insurance.

If you lend your car to a friend, roommate or neighbor, or someone not listed on your policy, they would be covered if they were driving your car periodically and not on a regular basis. Otherwise, that individual should be added to your policy.

That is why it is important to know what is included in your policy and your liability if you lend your car to someone. If you are still not sure about the terms of your policy after an accident, it is best to speak with an experienced lawyer who can review your auto insurance coverage and discuss your options.

What If My Car Was Taken Without Consent?

When someone takes your car without your permission, this is considered non-permissive use. This situation can create legal and insurance complexities, so understanding your rights and responsibilities is crucial.

Understanding Non-Permissive Use

Definition and Implications

• Non-Permissive Use: Non-permissive use occurs when someone uses your vehicle without your explicit consent. This can include situations where the car is stolen or taken by someone who was not authorized to drive it.
• Insurance Company Assumptions: Typically, insurance companies assume that anyone driving your car has your permission unless there is clear evidence to the contrary. This is based on the principle that permission is generally presumed unless explicitly denied or proven otherwise.

Proving Lack of Permission

• Challenges in Proving Non-Permissive Use: Demonstrating that you did not give permission can be difficult, especially if there is no written or documented denial. Without clear evidence, such as a police report showing the vehicle was stolen, or communication records showing your denial of permission, insurance companies may not accept the claim of non-permissive use.

What If My Car Was Stolen?

If your car is stolen and then involved in an accident in Appleton, the situation can be quite complex. Here’s what you need to know:

Reporting the Theft

• Immediate Action: As soon as you realize your car has been stolen, you should report the theft to the police. Provide them with all necessary details, such as the vehicle’s make, model, color and identification number (VIN). An official police report is crucial for filing an insurance claim and proving that the vehicle was stolen.

Insurance Coverage for Theft

• Comprehensive Coverage: If you have comprehensive auto insurance, it typically covers theft. This means that if your stolen vehicle is involved in an accident, your comprehensive coverage should cover the loss of the vehicle itself. However, it may not cover damages resulting from the accident unless specified in your policy.

Involvement in an Accident

• Liability for Damages: If your stolen vehicle is involved in an accident, the liability for damages depends on the circumstances. In many cases, the at-fault driver’s insurance (or their liability coverage) would be responsible for covering damages to other parties. However, your insurance company might still need to handle certain aspects of the claim, particularly if there are complications or if the vehicle was involved in the accident due to negligence.

Non-Permissive Use and Liability

• Liability Implications: If someone stole your car and caused an accident, you may not be held liable for damages, especially if you can prove that the vehicle was taken without your consent. However, insurance companies may initially assume that the vehicle was lent with permission unless you provide clear evidence to the contrary.

Steps to Take After the Theft

• Notify Your Insurance Company: After reporting the theft to the police, inform your insurance company as soon as possible. They will guide you through the claims process and provide instructions on what documentation is needed.
• Follow Up on the Claim: Stay in touch with your insurance adjuster to ensure that your claim is processed efficiently. Keep records of all communications and documentation related to the theft and subsequent accident.

If you find yourself dealing with a stolen vehicle or an accident involving a stolen car, it’s crucial to work closely with both law enforcement and your insurance company. For personalized advice and assistance, contact our firm for a free, no-obligation consultation.

Protecting Yourself When Loaning Your Car

Lending your car to someone is a gesture of trust, but it also involves risks. To mitigate potential issues and protect yourself, consider the following precautions and guidelines:

1. Verify the Driver’s Credentials

• Check for a Valid Driver’s License: Before lending your car, ensure that the borrower has a valid driver’s license. This helps confirm that they are legally authorized to drive and have met the necessary requirements to operate a vehicle.
• Review Driving History: If possible, review the borrower’s driving history. Some insurance policies offer coverage for drivers with clean records, so knowing their history can help you gauge their reliability and safety on the road.

2. Assess the Borrower’s Driving Abilities

• Evaluate Driving Skills: Consider whether the borrower has the necessary driving skills and experience. If you have doubts about their driving abilities, it might be wise to reconsider lending them your car.
• Look Out for Signs of Recklessness: If you know the borrower has a history of reckless driving or unsafe behavior, you might want to avoid lending your car to them. A history of traffic violations or unsafe driving habits can increase the risk of an accident.

3. Understand the Risks of Negligent Entrustment

• Definition of Negligent Entrustment: Negligent entrustment occurs when you knowingly allow someone to drive your car who is unfit or unsafe to drive. This could include unlicensed drivers, inexperienced drivers, or those under the influence of drugs or alcohol.
• Personal Liability: If you entrust your vehicle to someone who is clearly unfit to drive, you may be held liable for any accidents or damages that occur. This is because you failed to exercise reasonable care in selecting a competent driver.

4. Set Clear Terms and Expectations

• Communicate Responsibilities: Clearly communicate any expectations and responsibilities to the borrower. Make sure they understand how to operate your vehicle properly and are aware of any specific rules or conditions you want them to follow.
• Provide Necessary Documentation: Keep a copy of your vehicle registration and insurance information in the car. Inform the borrower of where these documents are located so they can access them if needed.

5. Document the Lending Arrangement

• Written Agreement: For added protection, consider creating a written agreement outlining the terms of the loan. This can include the purpose of the loan, the duration, and any specific conditions or restrictions.
• Record Communication: Keep records of any communication with the borrower regarding the lending of your car. This can include text messages, emails, or written notes confirming their permission to use the vehicle.

6. Ensure Adequate Insurance Coverage

• Review Your Insurance Policy: Before lending your car, review your insurance policy to understand how it covers other drivers and any potential liabilities. Make sure you’re aware of coverage limits and conditions.
• Consider Additional Coverage: If you frequently lend your car, you might want to discuss with your insurance provider whether additional coverage or a policy upgrade could offer more protection.

7. Take Precautions Against Vehicle Abuse

• • Inspect the Vehicle: Before and after lending your car, inspect it for any damage or signs of misuse. Document the vehicle’s condition with photos or notes to help resolve any disputes about damage.

• Set Usage Limits: If possible, specify the limits on how the vehicle should be used. For example, you might restrict the car to local driving only or prohibit certain uses like towing or off-road driving.

8. Be Prepared for Emergencies

• Emergency Contact Information: Provide the borrower with emergency contact information for yourself and your insurance company. Make sure they know how to reach you if they encounter any problems.
• Roadside Assistance: Ensure that your vehicle’s roadside assistance services are up-to-date and inform the borrower of how to use them if needed.

Lending your car involves risks, but by taking these precautions, you can better protect yourself and manage those risks. Verifying the borrower’s credentials, assessing their driving abilities, understanding the implications of negligent entrustment, and setting clear terms can help safeguard against potential issues. Always review your insurance policy and consider additional coverage if necessary.

Reach Out to Our Firm Anytime, Day or Night After an Appleton Car Crash

Our licensed Appleton car accident lawyers are available to provide answers to your legal questions. This includes discussing your options if you loaned your car to a friend, family member or someone else and they cause an accident. We are prepared to determine whether you have a valid claim in a free, no-obligation consultation.

Should we represent you, there are no upfront fees to get started and no fees while we work on your case. We only get paid for our legal services if we help obtain compensation on your behalf.

Sigman Janssen. Free Case Reviews. (920) 328-0700.