by Guest » Tue Mar 18, 2008 01:11 am
I am in California.
I have been loaning my second car to a neighbor-in-car-need. If she gets in an accident with a third party (let's assume she has inadequate insurance), can I (and my car insurer) be held liable to a third party if she were to get into an accident with a third party?
Bottom line: Does my generousity expose me to liability (beyond damage to my own car)?
Thanks in advance
I have been loaning my second car to a neighbor-in-car-need. If she gets in an accident with a third party (let's assume she has inadequate insurance), can I (and my car insurer) be held liable to a third party if she were to get into an accident with a third party?
Bottom line: Does my generousity expose me to liability (beyond damage to my own car)?
Thanks in advance
Posted: Tue Mar 18, 2008 06:44 am Post Subject: In California..
If she gets in an accident with a third party (let's assume she has inadequate insurance), can I
(and my car insurer) be held liable to a third party if she were to get into an accident with a third party?
See could actually be 2 facets of such an accident. Either she could be the at-fault party or she could be the party not-at-fault. Now, let us assume the worst scenario where she could be the party at-fault.
Now, over here you need to remember- In California, the main aim of maintaining liability insurance is to ensure financial responsibility towards avoiding vehicle accidents & also to keep the highways of California free from uninsured vehicles.
Hence, when you ask-
Does my generosity expose me to liability (beyond damage to my own car)?
My answer is yes. Your liability insurance shelters someone else other than you for personal injuries or any damages to property meeting all the financial responsibility needs in California.
An important thing that comes in connection to this is-
I have been loaning my second car to a neighbor-in-car-need.
Thats why I urge you to check out with your insurance agent/broker that you have perfectly maintained the required liability cover for each of your vehicles. You must note that Collision & comprehensive insurance do not suffice the financial responsibility needs.
Now, how would you satisfy your responsibility?
Obtain the California proof of insurance certificate (SR-22) towards broad benefits or the owner's policy (ie. your policy). Here in this case, you must note that the policy of your neighbor-being-the-operator does not suffice the responsibility needs. You'd also need to procure an evidence that being a public entity named at the Govt. Code &8111.2 you are leasing it.
Posted: Tue Mar 18, 2008 06:57 am Post Subject: min liability
My friend, let us go back to a couple of definitions for liability insurance in order to make things a bit clearer for you -
liability insurance Insurance protecting the insured against financial loss arising out of legal liability imposed upon him/her in connection with bodily injuries (or death) suffered, or alleged to have suffered, by persons of the public, or damage caused to property other than property owned by or in the custody of the insured as a result of the maintenance of the premises, or the business operations of the insured.
Pays for injuries to the other party and damages to the other vehicle resulting from an accident you caused. It also pays if the accident was caused by someone covered by your policy, including a driver operating your car with your permission.
Now, I believe its pretty much evident that the financial responsibility is yours since your car was used by someone. Also it is vivid that your liability policy would pay for such a damage in the event that someone had used the car with your permission. So, you can not evade your responsibilities under any circumstances.
Hope you know the minimum liability needs in California:
For any further information you may call up the California DOI through the Consumer Hotline :* $15,000 for injury/death to one person.
* $30,000 for injury/death to more than one person.
* $5,000 for damage to property.
1-800-927-HELP (4357)
8:00 a.m. to 5:00 p.m. M-F
Regards,
PressJerkY
Posted: Tue Mar 18, 2008 11:48 am Post Subject:
Bottom line: Does my generousity expose me to liability (beyond damage to my own car)?
Yep...insurance stays with the car...meaning your carrier is going to pay first (and probably only one to pay) assuming the neighbor is at fault....PERIOD, (in all states that I am aware of)...there are instances that should the damage the neighbor causes to another exceed your limits then her policy could kick in as excess...This is a huge problem, people loan their vehicles out...and will even have an agreement with the loanee..''ok if you wreck it your insurance (not mine) will handle it ok?" don't matter, you (nor the loanee) can make that decision...I've had loanees beg me, "please use my policy"..I can't...insurance stays with the car....and is primary, as long as that driver has permission to drive the vehicle....and you as the policy holder will also be the one that gets a rate hike (again assuming it is a chargeable 'at fault' accident)....
Posted: Tue Mar 18, 2008 03:52 pm Post Subject:
The driver of your vehicle probably meets the definition of an "insured" under your policy... meaning that they could obtain liability coverage from your policy. So even if only the driver could be held liable, your policy would probably still react to provide liability coverage.
I did not check state laws so I don't know if the owner can be held liable. In most state, yes. But there are some state where only the driver can be held liable.
PressJerkY made a great post... CA only requires $5k property damage coverage...? OUCH! That is just stupid! The state is not doing their residence any justice by not requiring higher limits. Minimum limits are just that... minimums... but $5k is way to low even for that. I'd recommend at least $10k.
Posted: Sat Mar 22, 2008 05:04 am Post Subject:
thanks everybody -- no accident has happened yet
my coverages are very high (500k) but i don't want my coverage to take the hit (and god forbid there is excess damage beyond the coverage limits ....)
guess i am taking back the keys
Posted: Sat Mar 22, 2008 10:11 am Post Subject:
guess i am taking back the keys
don't blame you a bit Jason, and very wise of you to inquire before there is a claim...wish more people thought that way! :DPosted: Sun Mar 23, 2008 12:47 pm Post Subject:
I think it is great that you are helping out a neighbor in need, hopefully they will get their own pretty soon so that you won't have this worry. I think it is great that you come here and inquire about the possibilities, honestly, I don't think I would have done that. Always good to know what could possibly happen. Hope nothing does, sounds like your insurance is high enough to handle it, goodluck, hope your neighbor gets on their feet soon and you will have your car back.
Posted: Mon Mar 24, 2008 12:53 pm Post Subject:
I would agree that for your own pretection you should go get the keys back. A good neighbor would understand the risks you are putting out there for them. I have occasionaly lent my vechicle for a day or two but nothing longer. It really is a scary thought how much someone else driving your car could impact you personally. It could also be lasting effects like increased insurance rates if the driver of your car was responsible. Congradulate yourself on doing your part in helping out and just kindly explain why you have to ask for your keys back.
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