Who Is Liable for an Accident – a Car Owner or the Driver?

Who Is Liable for an Accident – a Car Owner or the Driver?
is the owner of the car liable for an accident

You got hurt in a car accident. Now, you find out that the at-fault driver didn’t even own the car they were driving. So, what does that mean for your rights? Does the driver owe you damages? Does the car’s owner? Do both of them?

The short answer is that it depends. Either or both of them might have a legal liability to you for the injuries and losses you suffered. Contacting a skilled accident attorney is the most reliable way to find out about your rights and to get the money you need to pay for your medical care and other expenses.

Here is a review of the factors that commonly contribute to determining who owes you financial compensation after you get hurt in a car accident caused by a driver who did not own the car he or she was driving.

When is the owner of the car liable for an accident? 

When lawyers talk about “liability” for a car accident, they’re referring to a legal obligation to pay financial compensation for the injuries and losses an accident victim suffers.

That legal obligation typically arises from the law and/or from a contract, most commonly an insurance contract (also known as an insurance policy):

Fault for the Accident

The law assigns liability for a car accident in several ways. First, and most importantly, the party at fault for a crash generally owes financial compensation to anyone who suffers injuries in it.

The most common form of fault in personal injury claims is negligence, which occurs when:

  • Someone owes a duty of care to another person to refrain from acting in an unreasonably dangerous manner;
  • That someone breaches the duty of care by acting in an unreasonably dangerous manner, thereby putting another person in harm’s way;
  • Those unreasonably dangerous actions cause the other person to suffer an injury; and
  • The injury is of the type that can be remedied by payment of financial damages or other forms of legal relief.

Here’s an illustration of how the principle of negligence works in a car accident case. All drivers owe everyone else on and near the road a duty of care not to engage in dangerous or reckless actions behind the wheel.

A driver breaches that duty of care by, for example, speeding, driving drunk, or texting and driving. If those (or any other) unreasonably dangerous activities while driving cause an accident that injures others, the law deems that driver negligent, and the driver will owe financial compensation to the crash victims.

In addition to negligence, the law can assign fault for an accident in other ways.

For example, an individual or entity can cause an accident if they:

  • Engage in intentionally harmful conduct (such as road raging);
  • Manufacture or sell defective automotive products;
  • Sell or provide alcohol to a minor or (in some states) an already intoxicated person who goes on to cause a drunk driving accident.

In some circumstances, the law will also hold someone other than the at-fault party liable for damages in a car accident, even if that other person did nothing to contribute to the cause of the accident. Two general legal principles — vicarious liability and negligent entrustment — govern when and how this can occur.

Vicarious liability is a legal doctrine that holds a third party “strictly” liable (that is, liable without regard to fault in any sense) for someone else’s wrongful acts. In car accident cases, the most common scenario in which vicarious liability can arise involves an employee driving a car owned by his or her employer.

If the employee’s dangerous actions behind the wheel of a work vehicle cause an accident, the employer will often be held vicariously liable for the employee’s actions. In other words, accident victims can seek financial damages from the employer, not just the employee.

In all but one U.S. state, the law generally holds a vehicle owner vicariously liable for the negligent actions of a driver only when the driver is an agent or employee of the owner. The one state that differs from that general rule is Florida, which applies vicarious liability to all vehicle owners, regardless of their relationship with the driver who causes an accident while driving their car.

In the remaining 49 states, absent an employer/employee or similar relationship between the vehicle owner and driver, a vehicle owner will only bear legal liability for an accident caused by someone else driving the owner’s car when the owner negligently allowed the driver to take the wheel.

Under the legal doctrine of negligent entrustment, an owner who knows that a driver has a terrible driving history or does not know how to operate a vehicle safely will face legal liability if that driver causes an accident with the owner’s car.

Contracts to Assume Liability for a Car Accident (a.k.a., Insurance)

Separate from the liability the law imposes, individuals, businesses, and others can agree by contract to assume someone’s liability for a future car accident. The most common form of this kind of agreement is an insurance policy, in which an insurance company agrees to pay for its policyholder’s liability for a potential future car accident in exchange for the policyholder paying the insurer a one-time or periodic fee (known as a premium).

Virtually every driver in America must carry auto insurance to operate a vehicle legally. Each state has different laws dictating the type and amount of insurance drivers must carry, but those laws uniformly require all drivers to purchase liability insurance to pay for damages they cause in an accident that harms someone else.

Some states also require drivers to purchase so-called “no-fault” insurance, also known as personal injury protection (PIP) coverage, which insures a driver against their own injuries and losses in an accident, regardless of who caused it. In these states, a crash victim’s no-fault coverage constitutes the primary source of payment for crash-related damages. Victims typically cannot seek payment from an at-fault party’s auto liability insurance unless they suffer severe injuries and their financial damages exceed the amount of their no-fault coverage.

Is the registered owner of a car liable for an accident when someone else was driving? 

If a driver causes an accident while driving a car he or she does not own, the interaction of the three general principles described above will determine whether the owner, the driver, both of them or someone else bears liability for the crash victims.

Here’s a summary of how an experienced car accident lawyer might analyze liability in such auto accidents.

First, as we’ve explained, the general rule is that an at-fault driver who causes an accident through negligence or other blameworthy conduct will have a legal liability to the victims of a crash. Those victims usually have the right to take legal action in the form of a personal injury lawsuit against the driver unless they registered their car in a no-fault insurance state, and their own no-fault insurance covers all their injuries and losses.

Next, if the vehicle owner was the driver’s employer, and the owner allowed the driver to use the car knowing that the driver was dangerous or incompetent, then chances are good that the owner may be liable for the accident, meaning that the owner’s insurance covers the damages. 

Finally, depending on the types and amounts of insurance coverage carried by the driver, the victims, and the owner of the vehicle, and the law of the state governing the rights and obligations of the parties, one or more insurance companies may have a contractual obligation to pay financial compensation to the victims on behalf of a legally liable party.

What if a rental car agency owns the car?

Rental car agencies usually do not owe damages to car accident victims when someone causes an accident while driving a rental car. Most of the time, the driver at fault for crashing while driving a rental car and that driver’s liability insurance policy (including any supplemental insurance the driver purchased when renting the vehicle) will usually have an obligation to pay financial compensation.

But that’s not always the case. As we’ve explained, like any vehicle owner, rental agencies that knowingly rent to an unqualified or unsafe driver or that rent cars in Florida can face liability for a crash caused by their renter. Rental agencies can also have liability for crashes caused by their employees while driving an agency car. The law in most states may also independently deem a rental agency at fault for an accident if the agency rents a defective or poorly maintained car that crashes because it is unsafe to drive.

What if the car is stolen or driven without the owner’s knowledge?

If a driver takes a car without the owner’s knowledge and gets into an accident, the owner may still have legal liability to a crash victim, depending on the circumstances. It all depends on whether the driver had the owner’s express or implied permission to use the car. If so, then the owner may owe damages to crash victims. if the driver stole the car, the owner will usually not have liability

How can a car accident lawyer help?

If you’ve read this far, you probably now recognize that getting into an accident with a driver who doesn’t own the car he or she is driving can come with some legal complications. It may take careful investigation to resolve such car accident claims and diligent research to figure out who might owe you financial compensation for your injuries and losses.

That’s why you need an experienced car accident injury lawyer on your side. Car accident attorneys dig into the details of motor vehicle accidents to figure out how they happened and who should bear financial responsibility for them. Then, they get to work securing the maximum compensation from the party or parties with liability.

Every case differs, but an experienced lawyer can often obtain damages to help you pay for:

  • Medical care you need to treat your injuries and any future health complications you may develop because of them.
  • Goods and services you need to manage your daily life while recovering from, adapting to, or living with an injury.
  • Repair or replacement of personal property damaged in the accident.
  • Your pain, suffering, and diminished quality of life resulting from the accident and the injuries you suffered in it, including harm to your personal relationships and new inconveniences and challenges your injuries have caused.

Sometimes, a skilled car accident lawyer can also secure an award of punitive damages on your behalf. Courts generally have the authority to order payment of those damages when the at-fault party engages in extreme, outrageous, or intentionally harmful conduct.

Lawyers cannot guarantee that you will receive money for your injuries and losses. But by getting help from an experienced car accident attorney, you give yourself the best possible chance of obtaining the maximum amount available from the parties who are liable to you.

Don’t Wait to Protect Your Rights, No Matter Who Is Liable to You

Contact a car accident lawyer as soon as possible if you suffered injuries or lost a loved one in a car accident in which the at-fault driver did not own the vehicle. You may have only a limited amount of time to take legal action for money damages against the driver, the owner, or another party. The sooner you contact an experienced attorney for a free case evaluation, the better your chances of preserving important evidence, meeting deadlines for enforcing your rights, and securing the financial compensation you need to pay for your care and to return to living your life.