Auto Insurance Claims: Parents liable for excess damages, health damages, negligent entrustment

Question
My parents recently became very concerned that if I am driving their car under their policy that they can be sued for any damages exceeding the insurance coverage. Back in high school everyone gave rides to everyone else and i never heard of law suits being pursued by passenger victims of accidents as insurance was enough to cover any claims. Is it possible to have passengers of the car sign a waiver that acknowledges their risk of being a passenger and limiting their ability to sue to funds available from insurance? I understand that negligence cannot be waived, and as a safe driver (never in an accident and no tickets) i feel reasonably confident that i will not cause an accident that would be my fault nor cause health damages in excess of $150k. I would like to take my friends skiing since i have a van, my parents have $300k liability and $50k per person $150k per accident health benefits as well as PIP. My parents are willing to give me the car as long as they do not assume risk for damages resulting from any claims exceeding the insurance policy. Their main concern is health damages. What would they have to do to remove themselves from being at all liable, i.e make me completely liable for any damages. I am 21 and have my own address, they are willing to sign the car over to me as well.

Answer
Hi Mike,

You and you parents are smart to ask such questions, and also smart in the way your family has protected itself and its passengers with good insurance coverage.

You are a 21 year old emancipated man not living at home.  You wish to borrow your parent’s van to take friends skiing.  I see no problem whatsoever for your parents should you negligently cause injuries to your passengers or to any other party on the highway.

Here is the general rule of “black letter law” regarding an owner lending their vehicle to another.  An owner who NEGLIGENTLY entrusts his car to a driver may be liable if the driver causes an accident. NEGLIGENT entrustment occurs when the owner, with knowledge that the driver is not qualified to drive, consents to allowing the driver to drive his automobile. The driver's lack of qualification could arise if he is incompetent, underage, or intoxicated.

Your parents would have to have been negligent in entrusting their vehicle to you in order for them to be personally liable.  Hence, unless your parents know that you are an incompetent driver or one who is prone to take risks or one who habitually is intoxicated while driving, they are at no risk whatsoever for any excess judgment.  

You can drive your friends with no worries on the part of your parents.  Their insurance will answer any claim against you, and no one will have a claim versus them should you negligently cause an injury.  As for your own coverage, you are insured first via your parent’s policy, and secondly via your own auto insurance liability policy.  Hence, there would be little risk for you.

Hopefully you and your friends will have a GREAT time on the slopes,

Best Wishes,

Dr. Settlement, J.D. (Juris Doctor)
Http://www.SettlementCentral.Com