If you share a car among the family, it might seem like the easiest thing to let your teenager take your keys to meet their friends at the mall.
Here’s the problem: if your teenager gets in an accident, you’re the one liable for damages.
This is because of owner liability, and it can leave you paying the price for an accident you didn’t cause. Keep reading to find out more about liability in accident claims and how you can protect yourself.
First, let’s address the basic question. In an auto accident, who’s liable: the owner, the driver or both?
Let’s look at an example.
Say that Tom loans his car to his sister, Sara. Sara then drives that car into Rose’s car, resulting in minor injury and property damage.
In that case, Tom is liable for the damage Sara caused. Why? It’s simple: it’s his car, and Sara was driving it with his permission.
Now let’s say Sara caused a major accident while driving Tom’s car. Let’s say she totaled Rose’s car, causing thousands of dollars in damages. Who is liable?
Sara is liable for her driving that caused the accident and Tom is liable as the owner of the car, as long as Tom gave permission for Sara to drive his car.
This falls under the doctrine of vicarious liability, in which liability is assigned to the owner of a vehicle even if they weren’t behind the wheel when their vehicle was involved in an accident.
Michigan has an “owners liability” statute, Section 257.401, which helps clarify liability.
It states that the owner of a motor vehicle is liable for injury caused by negligent operation of that vehicle, though they are only liable if their vehicle is being used with their express or implied consent or knowledge.
In other words, you’re not liable if your car is stolen and then gets in an accident, but you are liable if you let your child drive the car and they get into an accident. This is true whether the permission was expressed or implied. Implied means it is based on circumstances and not on the actual words used.
For the sake of clarity, it is assumed that the vehicle is being driven with the implied consent of the owner at the time of the accident if it is driven by:
The most commonly cited method of proving liability based on implied permissive use is what’s called the family car or family purpose doctrine.
This is a doctrine in tort law which usually applies to cases where a parent is in the practice of letting their child drive, or give them regular access to the keys. Also, the law looks to whether the errand was benefiting the family. Under this doctrine, the parent (the owner of the car) is liable for damages if their child caused an accident while driving, as they knowingly allowed their child to get behind the wheel.
Keep in mind that liability in this doctrine will depend on whose name is on the title, the registration, who paid for the car, who regularly drives the car and the intent of the parents and child with regards to ownership.
Another instance in which an owner is liable for damages is what’s called negligent entrustment, which is similar to the family car doctrine.
Essentially, negligent entrustment involves entrusting your car to someone who is not fit to drive. This includes:
In these cases, your liability rests on the idea that you knew someone should not be allowed behind the wheel and you still let them drive your car anyway, putting others at risk of harm.
Finally, there’s negligent maintenance.
As the name implies, negligent maintenance is the failure to properly maintain your vehicle, putting others at risk of harm whenever your car is on the road.
This legal principle is due to the fact that you have an obligation to protect the safety of those in your car and those you share the road with. Doing so would reduce the risk of mechanical breakdowns that could cause an accident. Failure to properly maintain your vehicle could constitute a case of negligence.
This can include things like:
Essentially, if your car needs maintenance and you neglect it, and your neglect results in an accident, you can be held liable for any damages resulting from that accident.
Reading this, it might sound like the owner is always responsible no matter what.
Well, there are some cases where it’s a bit more complicated than that.
As a rule, you should assume that if a car is registered in your name then you are responsible for any damages caused should that car get into an accident.
However, a recent ruling by the Michigan Court of Appeals complicates that. Under this ruling, the court stated that the owner may not be the only one held liable if their car is involved in an accident—under certain circumstances. The best way to explain is through an example.
Let’s say that you have a car. You loan that car to Bill. Then Bill loans that car to someone else—his son, for example. And let’s say that Bill knows his son isn’t licensed, lost his license, has too many points on his license, or is simply not a trustworthy person where driving is involved. Yet, Bill loans your car to his son anyway.
Then, Bill’s son gets in an accident.
In this case, two people are liable: you (the owner), and Bill.
Why is Bill liable? Because he knew that his son wasn’t trustworthy and he loaned him the car anyway.
So, how do you protect yourself in cases like this?
It starts by protecting yourself before an accident occurs.
A general rule is that when you purchase car insurance, that insurance covers everyone in your household unless they were specifically excluded. Friends and relatives living outside the house may be included under the rule of permissive use.
Under the rule of permissive use, the friend or relative who drives your car is covered under your insurance. If they’re involved in an accident, you’re the one who has to file a claim with your insurance company. The friend’s insurance is secondary, so if damages exceed your coverage, the friend’s insurance pays the remainder. However, you’re the one whose insurance rates will rise.
It sounds like common sense, but don’t loan your car to someone who isn’t trustworthy. You’re the one who will suffer for it.
In addition, you have to be careful about how a car is titled.
If you are married, don’t title a car jointly. Title the car in the name of the person who will be driving it most of the time or all of the time . If your spouse is involved in an accident in a jointly-titled car, both of you are liable. In addition, the other party can go after other joint assets like your house. If only one of you holds the title, and that person causes a crash, then during or after a lawsuit your joint assets can’t be touched. That is because of the unique way married people own property in Michigan. It’s called by the by the “entireties”.
If you have a son or daughter, it’s always better to have a cheap car registered in their name. That way, if they’re involved in an accident, they’re the ones liable for it, not you. In addition, if you let your child take a car to college, make sure to transfer the title to them and notify your insurance company of the change immediately.
Don’t let your teenager’s mistake cost you big. If you’re staring down an expensive owner liability case, you need an attorney that will fight for you.
Giroux Amburn has a roster of experienced attorneys ready to help you figure out the best course of action for your case. If you need to speak with an attorney, click here to get started with your free consultation.
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