Loaning Your Vehicle: Yes, You Are on the Hook!

By: Sam Steinberg

If you loan your vehicle to friends and family and they get into an accident you can be held responsible for the accident.  The good news is that if you loan out your vehicle responsibly then your damages are capped by California law.

California’s Vehicle Code Section 17150 provides that an owner of a motor vehicle is liable for the injuries to “person or property” that results from the negligent use of that vehicle where the driver of the vehicle was operating the vehicle with the owner’s permission.  However, Vehicle Code section 17151 limits that liability to $15,000 per person, and $30,000 total, for injuries caused by the vehicle; section 17151 further limits the liability to a maximum of $5,000 for property damage caused by the vehicle.

The above limits are the minimum insurance requirements to legally operate a motor vehicle in California.  As long as your car insurance is current then you have nothing to worry about.  The California statute protects the owner of the vehicle by limiting their potential liability.

Here is how this would work in practice: let’s say you live in Corona with your wife and two children and your eldest daughter just started her first semester at Cal State Riverside.  Being a good parent, you purchase a vehicle for your daughter so she can drive to school and make you proud.  Even if she carries her own insurance, if you are the registered owner of that vehicle your insurance would be on the hook if she gets into an accident.  The same would be true if you loaned your vehicle to your best friend so he could drive to work in Norco while his car is being repaired.

There is an important caveat to the above rule.  You only get the protection provided by the Vehicle Code if you were not in any way independently responsible for the accident.  Before you loan your vehicle to another driver you have an independent obligation to check whether the driver is licensed and is a responsible driver. Your failure to do so would be held against you under a theory of Negligent Entrustment.

For example, if you loan your vehicle to a known drunk then you would be fully liable for any damages caused.  California Courts have found owners independently liable when they knew the vehicle’s breaks were not working properly, where the owner failed to properly supervise the use of company vehicles, and in many other similar circumstances.

So, before you loan your vehicle to another driver here is what you should do: (1) make sure your car insurance is current; (2) make sure that the person you are loaning your vehicle is properly licensed to drive; (3) make sure that the driver is responsible, competent, and trustworthy.  As long as you follow those rules you will be protected in the event of an accident.  If you have any questions don’t hesitate to contact the experienced attorneys at Thompson Steinberg.

Sam A. Steinberg, Esq.

P: 951-359-1209 x203



Sam Steinberg is a partner and co-founder of Thompson Steinberg.  He has extensive experience in all aspects of insurance, insurance coverage, and insurance litigation, vehicular accidents, personal injury, construction defect litigation, and general litigation.  He has a black cat that roams his home freely.

**The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This blog posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult with your own attorney.**


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