Any question about liability in a car accident starts with whether or not a state is a no-fault insurance state. For example, in a no-fault state like New York, Injured parties will file their no-fault claims against the insurance company that covers the vehicle in which the accident happened. If you have another insurance policy, you might file additional claims, depending on the coverage offered. That is the basic answer, but, as we all know, the basic answer seldom goes far enough in any legal situation.
In no-fault states, car insurance usually follows the car. The coverages that follow the car are collision, comprehensive, uninsured motorist protection, and property damage liabilities. Drivers must carry property damage liability, personal injury protection (PIP), and uninsured motorist protection. PIP follows the driver, unlike liability and uninsured motorist coverage.
Based on this reasoning, if you let someone borrow your car and they have an accident, bodily injury liability insurance pays for injuries to the other driver and their passengers. Property damage liability insurance may pay for damage to the other driver’s car if your friend was at fault. If the person who borrowed your car causes damage that exceeds your coverage limits, their liability policy can act as secondary coverage. But their coverage only kicks in after you reach your policy limits.
Generally, your policy will also cover any property damage that the borrowing driver causes under the property damage liability coverage. If the damages exceed your policy limits, the driver’s liability insurance will cover the excess. Similarly, damage to your vehicle should have coverage unless you choose not to buy collision and comprehensive coverage. You will have to cover the repair costs unless your friend pays or you can prove the other driver caused the crash. If so, that driver’s property damage coverage will apply.
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When Won’t Your Car Insurance Cover this Situation?
Even in a no-fault state, there are circumstances where your car insurance will not cover an accident by another driver in your car.
When an accident involves a driver who does not own the car they were driving, they must prove that the driver had the car owner’s express or implied permission to operate the vehicle. That will be pivotal in determining whether the owner’s auto insurance will cover the accident. If the use is permissive, your insurance will be at play.
Proving You Provided/Received Permission
Since you must prove that the owner gave implicit or explicit permission, you need to have an experienced car accident attorney familiar with all the ways to prove permission. Permission can be either explicit or implicit. Explicit permission is relatively easy to prove: the owner gave you the car keys. Implicit permission is another matter entirely.
Implicit permission requires an analysis of the facts and circumstances surrounding the driver’s vehicle use. Some of the factors to be considered are
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Relationship Between Owner and Driver
Spouses, parent/child, and employer/employee allow for an assumption of implied consent. For example, if an employer routinely allows an employee to pick up lunches in the employer’s car, if the employee does so on a day they didn’t ask permission, the court may find implicit consent.
Further, one person with implied permission can pass that permission to another person. In other words, someone who routinely uses a vehicle and allows another to do so likely shared their implied consent.
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Scope of the Permission
The permission an owner grants can be limited or unlimited. If the insured says, “take the car for your vacation, see you in a week,” they did not limit the permission. On the other hand, if the insured says, “you can use the car to pick up the pizza for dinner tonight,” it is limited permission. A claimant usually proves scope by explicit statements and the circumstances.
If you wish to assert a restriction, you must first name the nature of the restrictions (time, place, location, duration, etc.). Then, once the claimant has demonstrated the restrictions, you must show the driver’s deviation from them to deny coverage.
Blanket Denial of Coverage Prohibited
Insurance carriers may not unilaterally deny coverage in permissive use cases. Applicable law does not support a carrier’s assertion that a driver not named in a policy automatically lacks coverage. The policy will state whether it provides permissive coverage.
Business Use
Many policies require an endorsement for business usage. You may not use your car for business, but if you lend it to someone who uses it for business purposes, your carrier may deny coverage. Be sure to understand what your policy covers and what the person borrowing it plans to do before lending out your car.
Unlicensed/Inexperienced Driver
If you lend your car to an unlicensed driver, whether you know about their status, your insurance company will undoubtedly try to deny coverage. On the other hand, if the driver you lend your car to is licensed but inexperienced, the company may again attempt to disclaim coverage.
In this case, the carrier will not focus on the legal licensing aspect but instead is likely to concentrate on underwriting. They will claim to have underwritten the policy based on your experience and skill, not on a 17-year-old who has been driving for six months.
You Didn’t Give the Driver Permission to Use Your Car
If you don’t permit someone to use your car, various exemptions may apply
In general, your liability insurance covers:
- You, as the named insurance
- Your spouse and any children who live with you
- Anyone else you permitted
If someone is driving your car without your permission or beyond the permission you gave them, your insurance will not cover any accident-related damages. The term “beyond the permission” covers, for example, that you gave permission to drive your car to work and instead, the driver drove to a party in another state. If someone steals your car and crashes it into someone else, they did not have your permission, and your insurance will not cover the damages.
Your Policy Doesn’t Cover Permissive Use
Some policies just don’t cover permissive use. Others do cover it, but with less coverage than when you are driving. Other policies impose a higher deductible for permissive use. You will want to check out your policy before loaning your car to anyone. However, the law generally frowns on policies that prohibit coverage of permissive users in your insurance policy.
For instance, section 3420(e) of the New York Insurance Law provides that no companies can issue policies unless they include “a provision that protects the named insured against liability for death or injury sustained, or loss or damage occasioned within the coverage of the policy or contract, as a result of negligence during operation or use of such vehicle by any person operating or using the same with the permission, express or implied, of the named insured.”
You Excluded That Driver From Your Policy
Some states allow you to exclude a particular driver from coverage under your policy. Many states do not permit driver exclusions, so make sure you trust anyone you allow to drive your car. You cannot exclude such a driver simply by trying to write them out of your coverage.
What About a Serious Injury?
Even in no-fault states, you might still sue a negligent driver for all damages, including non-economic damages like pain and suffering, if you suffered – or the person you struck suffered – a “serious injury.”
The term serious injury can include:
- Death – Survivors can sue
- Dismemberment – The victim has lost a digit or a limb.
- Significant disfigurement – Visible scarring of such a nature as to subject the victim to ridicule and scorn
- Fracture – Broken bone of any sort
- Loss of a fetus – Losing a pregnancy as a result of an accident
- Permanent loss of use of a body organ, member, function, or system
- Permanent consequential limitation of a body organ or member – Can be an organ like your gallbladder or a system like loss of hearing.
- Significant loss of use of a body function or system – Loss does not have to be total, just permanent.
- Medically determined injury or impairment of a non-permanent nature that prevents the injured party from performing substantially all the material acts, which constitute such person’s usual and customary daily activities for not less than 90 days during 180 days immediately following the occurrence of injury or impairment.
If the accident causes any of these injuries, then any injured party hurt in the car can sue the at-fault driver for damages, including non-economic damages like pain and suffering. The last three categories are subjective, subtle, and complex. They are the source of frequent litigation and, if you can claim one of them, may encourage a settlement.
How Do I Sue if I Have a Serious Injury?
Once you establish that you have a serious injury, you can begin thinking about the damages you may be seeking to recover. The law generally recognizes three kinds of damages in personal injury cases.
Economic Damages – These damages include the straightforward out-of-pocket expenses easily ascertained with a paid invoice, timesheet, or other documentation.
They consist of things like:
- Medical & Hospital Bills – Any medical expenses resulting from the accident, including future medical costs. Drug, hospital, doctor, and therapy bills all fall under this category. Paid invoices will evidence these.
- Lost Wages – Salary and benefits you miss out on when you cannot work due to your injuries. Times sheets and old payroll records will demonstrate these figures. Future wages also figure in here.
- Lost or Reduced Earning Capacity – If you can’t continue to earn as you did, you may recover this income through economic damages.
- Property Damages – Covers your personal property damaged in the accident, including your vehicle.
- Rehabilitation Services – Physical, occupational, speech, or other rehab.
- Assistive Services – Any help you need because you can no longer fully care for yourself due to your accident.
Non-Economic Damages – More subjective than economic damages, non-economic damages often require expert testimony to establish their need and amounts of compensation.
Non-economic damages consist of, among other things:
- Pain and Suffering – Any physical or mental pain or suffering that interferes with your life after the injury
- Emotional distress – If you suffer emotional or mood disorders after your accident, you may be entitled to compensation for your distress
- Loss of enjoyment – Covers losses when you can no longer participate in activities you previously enjoyed
- Disfigurement – If you suffered disfigurement or permanent scarring because of your injuries
- Loss of consortium – Compensates you for changes in your relationships due to your injuries.
Punitive Damages – Punitive damages are rare in personal injury cases. Punitive damages punish the at-fault party and deter others from engaging in the same conduct. The conduct must be so egregious and so disregard for the well-being of others that it appears virtually intentional. The behavior must shock the conscience of the court.
No Caps – If you qualify to sue, there are no caps on any of the damages available to you in states like New York. This is no longer true in most states.
Seek Help From a Car Accident Attorney
If you were injured in a collision by someone operating a vehicle they didn’t own, you will want to work with an attorney experienced in these cases rather than deal directly with insurance company lawyers and claims adjusters. Your attorney will understand the tactics that the insurance company personnel use to avoid payment and will know how to respond to properly obtain that coverage.
Seek assistance from a legal professional who has experience with complex auto accident claims. You do not want to give up any compensation you deserve, so the right representation is key. Never assume that you do not have a claim because you were driving someone else’s car.
The law is complex in this situation, and if you suffered injuries in a crash, you need legal guidance from a trusted professional on your side.
