Woodland Hills Personal Injury Attorney Barry P. Goldberg knows that lending a car to a friend can be a huge favor to them, but also can result in huge liability to you should that friend get into an accident. Vehicle owners should know what liability they may face for permissive use of their vehicle.
“Permissive use” is when a vehicle owner occasionally lends his or her vehicle to another who is outside his or her household. Permissive drivers are typically relatives and friends of the owner of the vehicle. Depending on the circumstances, the owner of a vehicle lent to another can be held responsible for an accident caused by the permissive driver. California Vehicle Code Section 17150 states:
“Every owner of a motor vehicle is liable and responsible for death or injury to person or property resulting from a negligent or wrongful act or omission in the operation of the motor vehicle, in the business of the owner or otherwise, by any person using or operating the same with the permission, express or implied, of the owner.”
Damages resulting from a permissive use accident will first be recovered under the owner’s applicable insurance coverage for the vehicle. A common misconception is that an insured’s car insurance follows the insured; car insurance follows the vehicle! While there are some exceptions, recovery for an accident will first come from the owner’s coverage as the primary coverage, and then the driver’s insurance as secondary coverage if their policy coverage exceeds the primary coverage. If the person driving your car was not at fault, then the damages will be paid by the other driver’s coverage. The extent of an owner’s liability will vary depending on the circumstances, as discussed below.
Permissive liability when the driver is acting for his or her own benefit
A vehicle owner incurs only limited liability when the driver’s use of the owner’s vehicle is solely for the driver’s benefit. This category covers most permissive use accidents. California Vehicle Code Section 17151(a) states:
“The liability of an owner … not arising through the relationship of principal and agent or master and servant is limited to the amount of fifteen thousand dollars ($15,000) for the death of or injury to one person … and … to the amount of thirty thousand dollars ($30,000) for the death of or injury to more than one person…”
Thus, if you let your friend borrow your car to run an errand, and they subsequently get into an accident where they are at fault, then your liability for the accident will be limited to fifteen thousand dollars for injury or death to one person, or thirty thousand dollars for injury or death to more than one person. Section 17151(a) also limits your property damage liability to five thousand dollars ($5,000) for property damage caused to others in the accident.
Permissive liability when the driver is acting for the owner’s benefit
Liability will be unlimited for the owner of a lent vehicle where the driver is acting as an agent or employee for the owner. Changing the example above, if you lend your car to your friend for them to run an errand for you, and that friend gets into an accident using your car, then you may face unlimited damages for your friend’s negligent driving if your friend was acting as your agent at the time of the accident.
Permissive liability when the accident is due in part by the owner’s independent negligence
Owners are on the hook for all the damages that flow from a permissive use accident if the owner was negligent in loaning his or her car to the driver. For instance, if you loan your car to a person who is unlicensed, and fail to make a reasonable inquiry into their licensed status before lending the car, then you can be found to be negligent for loaning your car to such a person. Not only is this a negligent act, but it is also a violation of California law:
“No owner of a motor vehicle may knowingly allow another person to drive the vehicle upon a highway unless the owner determines that the person possesses a valid driver’s license that authorizes the person to operate the vehicle. For the purposes of this section, an owner is required only to make a reasonable effort or inquiry to determine whether the prospective driver possesses a valid driver’s license before allowing him or her to operate the owner’s vehicle.” California Vehicle Code Section 14604(a).
Unlimited liability for permissive use of your vehicle will also apply instances where the vehicle has a known defect (such as faulty breaks), or when you lend your vehicle to an unlicensed minor.
If you or a family member is injured in a “permissive use” accident, consult with an experienced personal injury trial attorney.