Many of us don't think twice when friends ask to borrow our car. We trust them.
But, what happens when they get into an accident? Are you liable for the damage, even if you weren't driving?
I have good news and bad news. Let's start with the bad news.
When you loan someone your car, you become liable for their actions through vicarious liability. For example, 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 ... by any person using ... the same with the permission of the owner." So, even if you weren't driving the car, victims may sue you for damages caused by another person driving your car.
Most states that hold owners liable for another driver's actions limit the owners' liability. California Vehicle Code section 17151(a) limits an owner's liability to $15,000 if the accident causes injury to one person and $30,000 if two or more people are injured. Owners are also liable for up to $5,000 in property damage.
These limits don't apply when you were negligent yourself in lending your car to the other driver. This usually means you loaned your car to an unlicensed driver or someone with a known habit of unsafe driving. You are also negligent if you knew there was a defect in the car, but let someone else drive it anyway.
The good news is that you probably won't have to pay for all the damages out of pocket. Your car insurance follows the car, not the driver. So even if you weren't driving the car, your car insurance will cover the damage caused by and to your car.
Your car insurance will be considered the primary insurance. It will be used first to cover damages. If your friend also has car insurance, his insurance will be secondary, meaning it will cover damages after the limits of your policy have been reached. If the damage exceeds your policy limit, and your friend doesn't have his own car insurance, you will have to pay the rest of the damages out of pocket.
However, all of this is assuming your friend was at fault in the accident. If the other driver was at fault, you'll make a claim with her insurance to cover the damages. Hopefully, she's not uninsured.
If you or a friend has been involved in a car accident in your car, an experienced personal injury attorney will help you assess your options and make an insurance claim.