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When the car that hit you was on loan: Vicarious liability laws

Sometimes people make really poor choices for good reasons — like loaning their car out to someone even when they know it’s probably not the smartest thing they’ve ever done.

For a variety of reasons, people negligently hand their car keys over to other people all the time. The need really is urgent, they reason, or it’s just a really short trip. They say, “Okay, but please be careful, and don’t get into an accident!”

The next thing you know, you’re broadsided by that very same loaned-out car since the driver is paying more attention to the GPS or a cellphone than he or she is focusing on the road and traffic.

Are you simply out of luck? Are you stuck paying your own medical bills and losing whatever income you happen to lose while you’re off work and healing from your personal injuries, just because the driver has no insurance?

Absolutely not.

In many cases, insurance follows the vehicle that’s insured, not the driver — so the car may be insured regardless of whether or not the driver is carrying his or her own insurance.

Even if that isn’t the case, however, the law creates a vicarious, or substitute, liability between you and the owner of the car.

That doesn’t let the driver off the hook if he or she has any insurance, assets or income that can be used to satisfy a lawsuit judgment. However, it does makes the car’s owner equally liable.

This is true in numerous situations:

  • The family car was being used by someone (like a teenager) who lives in the same household as the owner
  • The car was being used by someone who routinely borrowed it and did so without having to ask specific permission (like a close relative with his or her own set of keys)
  • The vehicle’s owner negligently entrusted the vehicle to a driver he or she had reason to know was a bad risk or uninsured
  • The vehicle’s owner was the driver’s employer and the driver was on an errand for the boss or the company

In all those situations, you can relax because the law allows you to collect from the owner’s insurance — even if the driver has none.

Source: FindLaw, “Vicarious Liability and Negligent Entrustment,” accessed Jan. 04, 2018



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