QuestionI allowed a friend to use my car. Without my knowledge, she allowed her boyfriend to take the car. I do not know this person. I don't even know if he has a license, let alone insurance. While he was borrowing the car, he rear-ended another driver. I don't know what to do. Am I liable for this? The unauthorized driver is in the hospital and my friend called me to let me know. There is a police report which I have not seen, however my friend tells me she feels my car is totaled and there isn't "a lot" of damage to the other car. Should I put a claim in with my insurance. Does this count as "permissive use?" I did not allow him to use my vehicle, but I allowed my friend and she in turn gave him permission. I need to know how to protect my best interest. If I have to go through my insurance, can I sue either or both of them for my deductible and/or any associated rate increase? I also had a minor accident recently with another one of my cars after 12 years of a clean driving record. I don't want 2 incidents within 3 months to brand me as high risk and get my policy cancelled. Either way, I have learned a valuable lesson... don't loan out my cars!
AnswerI was given the following information to pass along to you:
May I respectfully add to the answer given, and suggest that the expert did NOT mean to imply that YOUR insurance will pay for the damage to the third party's vehicle in EVERY state. At common law, the owner IS NOT responsible for damage done by non-permissive users. Hence, the answer may hinge upon what your state insurance commissioner tells you regarding any statutory scheme by which your state seeks to overturn the common law and make the owner liable for all damage done by her vehicle, no matter if the driver had permission or not.
First and foremost, you asked three VERY important questions which the expert did not address at all. Plus, there is a fourth possibility that he hints at, but does not suggest: going after the driver's auto insurance.
#1. Am I liable for this?
#2. Does this count as "permissive use?"
#3. "I don't want 2 incidents within 3 months to brand me as high risk and get my policy cancelled."
Here are my answers, which may differ from what the expert told you.
#1. Am I liable for this?
NOT IN MOST STATES—you loaned your vehicle to a competent driver and she had no authority, express or implied, to loan your vehicle to another. Hence, you are NOT liable in most states. Your state may have established vicarious or imputed liability by statute, but most do not. You can check on that by asking your state insurance commissioner.
#2. Does this count as "permissive use?"
NO—and as such, it is NOT GOING TO BE COVERED under your insurance, unless yours is a state that has a statute to the contrary. This driver is in the same status as a driver of a stolen vehicle. In both cases, the owner's insurance will most likely tell the victim who suffered property damage and personal injury that they are not going to defend the driver. He is on his own, and he can access his own insurance to cover his negligence.
#3. "I don't want 2 incidents within 3 months to brand me as high risk and get my policy cancelled."
This question implies two things that we do not know for sure. First off, chances are more likely than not that your insurance WILL NOT PAY one dime on the liability side. Hence, it cannot count against you.
Secondly, the fact that you used your collision coverage is NOT going to count against you as an "at-fault" accident. Your state insurance commissioner should have made some rule defining "at-fault" accidents for purposes of increasing the insurance premiums.
In this case, the accident is NOT "at-fault" since you have no fault or negligence at all. So if you do have to use your deductible, then you can do so without worry that your rates will go up.
#4. Yes, as the expert points out, you can ask for your deductible from the party that was negligent. But why not make the claim against their insurance for the entire damage? Why make your own insurer pay when the liability rests elsewhere? If the driver has his own insurance, then they should be made to pay.
