When a driver injures you in an accident, you need to know if they have liability insurance to pay your claim. If the driver was operating someone else’s vehicle, you have another pressing question: Who is liable, the car owner or the driver?
When you’re determining who should compensate you for your injury, the inquiry of whether it is the car owner or driver becomes a three-part question:
- Who is liable for my injuries?
- Who is responsible for compensating me?
- Which insurance company will pay my injury claim?
Who Is Liable for Your Injuries?
When a driver runs a red light, strikes you in the rear, or commits any other negligent act behind the wheel, they are liable for your injuries. In most instances, this standard applies to anyone who injures you. The person who negligently causes your accident must pay for your injuries, even when driving someone else’s vehicle.
Drivers Sometimes Share Liability With Others
Drivers usually can’t avoid liability when they injure you in an accident. They may share liability with other people, businesses, government entities, or organizations. Every state has a comparative or contributory negligence statute or standard.
These legal guidelines acknowledge that more than one person is sometimes liable for accidents and injuries.
- Negligent Entrustment: In most states, when a vehicle owner lets an unlicensed, incompetent, or alcohol/drug-impaired driver use their vehicle, the owner is independently liable. This standard applies to commercial vehicle owners in most states, but Texas is a recent exception. State legislators recently implemented a legal barrier to negligent entrustment claims. When an injured person files a lawsuit, the court allows a two-part trial. The injured person must first prove their damages and the commercial driver’s negligence. Only then do they proceed against the commercial vehicle owner for negligent entrustment.
- Negligent Circumstances: Accidents occur due to drivers’ and non-drivers’ negligent actions. Some motorists lose control due to deteriorating pavement or when another vehicle drops debris on the highway. Sometimes, unrestrained animals wander into moving vehicles’ paths. When these circumstances cause an accident, the negligent parties share liability with the drivers who crash into someone else’s vehicle.
- Defective Vehicle/Repairs: When a defective vehicle, defective auto part, or negligent repair causes or contributes to an accident, the manufacturers or contractors share liability.
- Negligent Loading: When a commercial vehicle’s load shifts, it sometimes produces a dangerous sequence. Shifting loads sometimes cause jackknives, overturns, or other incidents unique to large trucks. Truckers and their cargo suddenly fall or roll onto the highway or other vehicles. The commercial vehicle blocks oncoming traffic and sometimes causes multiple crashes. A loading contractor or shipper must load a vehicle in compliance with the Federal Motor Carrier Safety Administration’s Cargo Securement rules. When the loading contractor or shipper doesn’t comply with these rules, they share liability for any accidents.
Car Owner or Driver: Who Is Responsible For Compensating You?
The negligent person or entity that causes your accident owes you compensation for your injuries.
When an accident involves someone else’s car, a commercial vehicle, road or vehicle defects, or other more complex situations, this simple analysis becomes more complicated.
- Personal Vehicles: State statutes and financial responsibility laws dictate that drivers must comply with their duty to pay for the damages they cause. Owners have that same responsibility. If a driver operates someone else’s car, the owner’s insurance “follows the car.” The owner’s insurance company usually complies with state financial responsibility mandates on behalf of the driver.
- Commercially Owned Vehicles: Commercial drivers must provide insurance to cover their negligent acts. While they work for transport companies, their employers usually meet their liability coverage requirements. Even if the transport company owns the tractor, they don’t always own the trailer. Tracking down trailer owners, loaders, or other negligent individuals or companies requires diligent research. Unless liability is clear, these entities won’t usually step up and take responsibility without legal action.
- Other Negligent Parties: When a product defect, negligent repairs, or negligent loading contribute to you crashing into another vehicle, you must usually get the responsible party to take responsibility. This process often requires evidence and a costly expert’s opinion to support your allegations. If the defect or negligent repairs affected the other driver’s vehicle, you have few direct legal options. When an accident involves an unrestrained pet, some jurisdictions hold owners strictly liable for their pets’ actions. In each of these situations, the negligent person is ultimately responsible. Unless you take legal measures, the responsible party likely will not take responsibility for their actions.
- Government Entities: If your accident occurs due to a deteriorating road, faulty traffic light, or infrastructure defect, you must determine if the government entity is responsible for the unsafe environment. Some entities offer a restrictive claims process that you must follow to make this determination.
Which Insurance Company Will Pay Your Injury Claim?
#1. Insurance Follows the Car
When you sustain injuries in an accident, you want someone to accept liability and pay your injury claim. Insurance follows the car, so the vehicle owner’s insurance company usually accepts responsibility. When a policyholder reports an accident, insurers investigate, determine liability, and pay what they owe. While this is the basic description of an insurance company claim, the process doesn’t always work out this way.
#2. Sometimes the Driver or Car Owner’s Liability Insurance Doesn’t Apply
In states with compulsory bodily injury liability insurance laws, drivers and owners must insure their liability exposures. Many states require proof of financial responsibility when drivers obtain or renew their licenses or vehicle registrations. They must also show proof of coverage after an accident.
When driving another’s vehicle, police officers usually accept the owner’s insurance as proof of financial responsibility. Because insurance follows the car, the owner’s insurance company typically accepts the claim.
However, coverage issues still arise because:
- The policy is named-driver only (coverage only for a person named on the policy.)
- The driver didn’t have permission to use the vehicle. When a policyholder reports the incident to the police, insurers handle the claim as a theft. They deny coverage for any accidental damages caused during a theft.
- The policy expired or was non-renewed.
- The policy limit cannot fully compensate you.
#3. Some Drivers Choose Insurance Alternatives
In some states, drivers prove financial responsibility by posting a bond or a cash deposit. This method usually covers the individual’s liability exposures when driving a vehicle. A deposit often requires placing a lien against real property for an individual. If a driver injures you, you only have access to the bond or deposit after receiving a judgment.
#4. Some States Don’t Require Bodily Injury Liability Insurance
All states except Florida, New Hampshire, and New Jersey require bodily injury liability insurance. After certain convictions, New Hampshire requires SR22 insurance filings. New Jersey and Florida mandate Personal Injury Protection coverage (no-fault) and property damage liability coverage. Insurers must offer optional liability coverage. States usually require commercial transport companies to have liability insurance.
#5. Some Commercial Entities Pay Their Own Claims
Many companies purchase liability insurance policies that pay claims for people they injure. Financial responsibility laws also accept bonds, cash deposits, and self-insurance certificates in most states.
Commercial Self-Insured Retentions And Self-Insurance
When large corporations self-insure or have traditional policies with high self-insured retention limits, they control or influence claim settlements.
- S-I-R: Some large corporations obtain liability policies with large self-insured retention limits that operate like deductibles. Commercial insurance claim departments handle and pay the claims, but policyholders ultimately pay them back.
- Self-Insurance: Other large corporations self-insure all of their losses. Each company operates its own claim program or pays someone else to do it. Ultimately, claim payments come from a company’s funds.
#6. Your Uninsured Motorist Insurer Might Compensate You
When you sustain an injury in an accident, you can’t always depend on negligent/responsible parties having valid insurance. When no liability insurance covers your accident, your insurer considers settling your claim under Uninsured/Underinsured Motorist coverage. UM/UIM coverage is mandatory in many states but optional in others.
If you have UM/UIM coverage, your insurance policy settles your injury claim if:
- The other person is negligent and caused your injuries but has no insurance.
- The driver/owner’s liability insurer is insolvent.
- A person hits you and leaves the scene unidentified.
- The negligent driver/owner doesn’t have enough insurance to pay for your injuries.
If any of these circumstances apply, your insurance company handles your claim like a liability claim. They negotiate a settlement the same way the other driver/owner’s insurance carrier would have done if they’d had liability insurance.
Do You Need an Attorney When You’re Hurt in a Car Accident?
You need a car accident attorney to resolve liability issues and coverage challenges after a crash. Car accident law firms deal with responsible car owners and drivers, insurance companies, self-insured commercial entities, and attorneys. Your car accident lawyer can work to resolve critical issues while you focus on healing.