Before you hand your car keys to your teenager, be sure that you are aware of your liability in the event of an accident. Nearly every state has laws that make parents liable for property damage and personal injury caused by their minor children. Most of these statutes are limited by certain conditions and place caps on the parent’s financial responsibility. Below is a glance at the rules in California imposing liability on parents for damage or injury caused by their child in a collision.
Permissive Use Liability
If a parent gives his child permission to use his car and the driver negligently or intentionally causes injury or death to another person, the owner of the car (parent) is vicariously liable. Permission to drive is typically implied in close relationships, such as a parent-child relationship. The permissive use law places limitations on the liability of the car owner. The liability is restricted by statute to a maximum dollar limit of $15,000 per injured person, $30,000 per incident even when more than two people are injured, and $5000 for property damage. These limitations apply if the parent did not behave negligently in permitting the car to be used by the driver. In addition, liability only exists if the parent signed and verified the child’s driver’s license application. If a parent opts to rescind the application, the minor child relinquishes his license.
Once a parent gives a child permission to drive the family car, the driver is protected under the policy on the car and is entitled to the same coverage limits as the vehicle owner. This is known as “omnibus” coverage. A parent may attempt to prevent a party who has been injured in an accident with the child-driver from bringing a claim under his policy by claiming that the child took the car without permission and without the parent’s knowledge. This approach can have disastrous results since the child can then be charged with a crime for unlawfully using the car. Instead, the concept of implied permission can be used to secure coverage in a similar scenario. Implied permission means that the circumstances in the home indicated to the child that he had permission to use the car, even though no express permission was given.
Parents of teen drivers should note that these liability caps may not be applicable when an accident occurs in some cases. Under the theory of negligent entrustment, a parent could be exposed to additional liability if he or she knew that the child is not a safe driver. For example, if a child has a history of accidents, traffic violations, or substance abuse, the parent is presumed to be on notice that the child is not a safe driver. The relevant inquiry is whether the parents knew or had reason to know that the child-driver was incompetent, inexperienced or careless.
Negligent entrustment is usually not a successful theory in attempting to obtain a larger recovery than the liability caps allow. Homeowner’s policies offer general liability coverage, but exclude claims arising from automobile use. For claims related to the use of a car, the claimant is limited to collecting from the owner’s car insurance policy or personal assets, and the latter is typically complicated and difficult.
Insurance Policies and Permissive Users
Under California law, the car owner’s liability policy must cover permissive drivers. The insurance company can establish limitations for permissive use coverage through explicit language intended to restrict amounts to $15,000, $30,000 and $5000, depending on the injury and damage.
If you or a member of your family was injured in an auto accident, contact Alexander Law Group, LLC. Our exceptional personal injury lawyers will be sure you get the maximum compensation possible. Call 888.777.1776, or contact us online.