Who is ultimately financially responsible after an automobile accident?

In My Humble Opinion (IMHO)
#1

This could vary from state to state. You’re not a lawyer or at least you’re not my lawyer. I’m really interested in generalities even though I’m going through this.

Suppose that my daughter who was 20 at the time, rear ends another vehicle. She was given a ticket for causing the accident. The driver of the other car was injured. Not life threatening or anything but over the past 2 years, she’s accumulated $30k in medical bills.

Today I received a call from my insurance company that the woman, through her lawyer would like $100k. That’s twice my liability coverage. She believes that once the lawyer finds out that insurance will only pay $50k, he’ll take it but that is TBD.

The car is in both of our names. I’ve made the insurance payments. Do I have any liability? I know that my daughter does but she also doesn’t have any assets.

If served, obviously I’ll hire an attorney. But I really am curious about the general question of who is liable or potentially is responsible.

If it matters, this happened in a “at fault” state, if that’s an actual thing. We’re definitely not a no fault state.

#2

I have a friend who was in a very similar situation in Maryland, although the figures involved weren’t nearly as high. His son hit someone, it was clearly the son’s fault. Son is 23, lives at home, full-time student, still on the dad’s insurance. My friend’s lawyer told him he had no legal liability for his son’s accident.

I do not know the legal details. IANAL or anything remotely resembling a lawyer.

The other lawyer probably picked 100K because that is a common liability coverage (50K is light IMHO; I have 250K/500K).

#3

I agree that 50/100 is light and I’ll be upping it to protects assets but it does lead to the question of why would anyone with no assets have anymore than the minimum? In my state it’s 20/40.

#4

Well, the “plaintiff” (or soon-to-be) did this wrong. Had she had any medical injuries related to the accident she should have been claiming them against your insurance the entire time.

But, the “burden of proof” rests on the plaintiff’s shoulders. She has to prove that the accident caused her injuries. Then, she’ll have to come up with a reason as to why she waited two years to contact you (statute of limitations?) and had accumulated 30k of medical bills. That’s 15k/year, 1.25k/month NET. Assuming 20% deduction for fed/state/local/medicare/etc you have 1.5k/month of gross income going to medical bills which are due to someone else’s negligence. That’s substantial, you could could a decent Honda Accord for that!

That would not have lasted 1 month with me.

Ultimately, they (them and your insurance company) will settle out of court as it’s just cheaper. The insurance company knows they’ll never get the money back on a counter-sue if she has that much in debt for medical bills. It would take years and years to get the money back.

BUT, anyways, to answer your OP:

Liability for negligence is typically personal. Whoever caused the damage is the one who has to pay for it. There might be some aspect of joint liability as you own the car and she had permissive use of it. But, you did your due diligence by insuring that she had a license and had insurance. Nothing else really would be expected of you as she was not a minor.

Also, I am not a lawyer. Just an FYI.

#5

There is nothing that says that damages must be limited to how much assets the defendant has on hand. I believe that if you are successfully sued for more than your insurance covers and also more than your current assets, the court could also order that some part of your future income be garnished to pay damages. I don’t know the legalities of how damages are determined (“pain and suffering,” for example), or whether a plaintiff would find it practical to seek that type of judgment due to the difficulties in collecting.

#6

In my state, insurance follows the vehicle. Who owns the car? Who bought the insurance policy? If it’s your car and your insurance, you could be liable for any award over your 50K in coverage.

Again, that’s just in my state.

#7

As an anecdote I was on Jury duty in a car accident case, and the owner of the car was being sued as well as his son the driver.

It may or may not make sense to sue someone with no cash. In my state if the defendant has a nice Porsche or stamp collection you might get it, but wages, household furnishings, home and car equity are exempt up to an amount that would allow just about anyone to live comfortably.

#8

Insurance generally does follow the vehicle (if the driver has the owner’s permission) but that does not mean that liability follows the owner/policyholder. Two separate issues.

#9

I recall a case in the 1960’s that got the law changed in Ontario. The guy dropped off his car at the local garage (remember when gas stations had those?) for repairs. They kept the car overnight, and that night the mechanic had an accident while out partying with it. The owner was deemed liable because that’s what the law said at the time.

I suppose if, based on her driving record, you should have known better than to let your daughter drive, or some such argument, they might drag you in as contributory negilgence - but if the law says only the driver is liable, then you are not liable. I assume your insurance company is because they cover it no matter who was driving.

#10

Sorry, I didn’t mean to imply otherwise. She has been in contact with my insurance company the whole time and they have been paying her bills. It’s my insurance company that hasn’t been in contact with me.

#11

Since this is about a specific legal case, it’s best suited to IMHO.

Colibri
General Questions Moderator

#12

Understanding there are about 51 different sets of rules in the USA alone, and about a gazillion subtle details that can dramatically change the nature of a case:

Insurance follows the car: ordinarily true, however there are a few companies that will not provide coverage if the driver is not the named insured. But usually, this phrase means that if The Jester is driving Nars’ car and causes an accident, Nars’ policy will be primary and The Jester’s policy will be excess (kick in only when Nars’ policy is insufficient). However, most policies also provide coverage for Non-Owned Cars. Which means The Jester could, If he wanted, file the claim for the accident under his own insurance, making IT primary, and leaving Nars’ as excess. This keeps Nars happy, because he doesn’t take the premium hit for something The Jester did, and it keeps The Jester protected in case Nars is a cheapskate and has low liability limits ( :slight_smile: )

Injuries to other people: This is called a Bodily Injury claim. With a few exceptions (Montana being one) a BI claim does NOT handle bills as they are incurred, but is instead paid as a lump sum settlement in exchange for a release (a document that says, in effect, “Nobody was liable for this accident, but if Electronbee will agree to not pursue The Jester and Nars for bodily injury damages, Shifting Sands Mutual will give Electronbee $23, 420.”

OP’s Question was who is financially responsible?: The driver of your car is the one who caused the accident and is primarily responsible. If you, the car owner, know The Jester to be a drunkard with a reputation for driving furiously, and he reeks of alcohol because he’s loaded as a freight train and everyone around you knew it when you handed him the keys–YOU also become responsible for the resulting havoc through the doctrine of “negligent entrustment.” That means just what it sounds like it means. Also, if the person you loaned the car to was driving it “on the clock” for work purposes (Pizza guy, window salesman, courier, etc.) then the company he works for would be “vicariously liable” for any accidents such a driver might cause.

Attorney settlement demands: Almost every time, an attorney will begin BI claim negotiations by requesting/demanding the policy limit. The initial demand means nothing. The insurance company SHOULD counter with an opening offer that represents a possible jury verdict based on the known facts, and not less. The goal of the insurer is NOT to settle the claim for as little as possible, its goal IS to protect their insured, which means attempting to settle the case for a reasonable amount without exposing their insured to the uncertainty of a jury trial. Which is not to say trial is a bad thing–In my experience about 90% of jury verdicts are much lower than my best prelitigation offer.

Claims worth more than the available insurance & assets: Collectability (income attachments, forced property sales, etc.) varies wildly from state to state, and from situation to situation. Injured parties need to make a choice: take the money that’s on the table, or go for a verdict which may or may not be collectable.

#14

Reported the last post.

#15

Tell your insurance company to try to settle within your policy limits and protect your personal assets.

The plaintiff will probably accept policy limits if not catestrophic injuries.

If they don’t offer the entire policy, hire an attorney to offer plaintiff an assignment of your rights against your insurance company in exchange for agreement not to execute against your assets.

If your insurance company offers policy limits but plaintiff won’t release you, remember your insurance company still has obligation to defend you and try to limit your exposure.

#16

I would like to point out that the insurance company owes you a defense in any lawsuit, up to policy limits.
In the OP, the insurance company will provide a lawyer to defend you. They will have the insurance company as their primary client, but they will defend you.
However note the words up to the policy limits.
Example you have 15K/30K bodily injury, you are drunk and run over a school bus full of kids. Lawsuits total 2 million dollars. Insurance company writes a check for 30K and says see ya, wouldn’t want to be ya. They are not going to defend you in a $2,000,000 claim on a 15/30 policy.
Old joke in the insurance business.
Question: What is the difference between 15/30 and a 1 million dollar limit on your policy?
Answer: The quality of the lawyer the Ins company hires if you have a claim.

#17

Though this is a slightly moldering, almost-full-zombie thread, I thought of one other point.

The plaintiff could argue that the vehicle owner is partly liable if they can show a defect in the vehicle and that the owner knew, or reasonably should have known, that there was a such a problem that contributed to the accident. Suppose the vehicle had faulty brakes and the mechanic at the last oil change pointed out the problem and had the owner sign to acknowledge that he was informed.

Depending upon the type of defect, by the same logic the plaintiff could try to drag the vehicle manufacturer in to the case.

#18

As it should turn out, once the policy limits were disclosed, the plaintiff’s attorney quickly accepted and the case was settled.

#19

That’s generally the way it works.

You hit car, cause 200k in damages. Your liability pays 150k. You’re on the hook for 50k.

There are all the usual shenanigans going on with who’s at fault, subrogation, etc… but ultimately, you’re personally responsible for the entirety of the damages; that’s why you carry insurance in the first place.

Typically they’ll have to sue you to recover that 50k though, and your lawyer will probably try to settle for much less than that if they can.