What is a registered owner's liability if someone took her uninsured car without permission?
UPDATED: August 1, 2017
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If an uninsured car is taken without any permission—whether explicit or implied—the car’s owner should not be liable for damages in a car accident. Establishing that will likely involve filing a police report for car theft against the person who took the car. You can also sue whatever driver was at fault in causing the accident—the unlicensed driver, or any 3rd party driver who hit the car—for your repair costs and for any other costs or amounts you have to pay out as a result of this.
First, nothing is “borrowed without permission.” To borrow something means to have permission to take or use it. When something is taken without permission, it is stolen.
If a car is stolen—in the eyes of the law even when it is taken for a “joyride,” then returned later—the car’s owner is not responsible for any damage or injuries caused by the thief. That is because (1) a car’s owner is only liable for accidents caused by people whom the owner permitted to use the car—and if a car was stolen, it was taken without permission; and (2) as a general matter, the law does not hold person A liable for the consequences of the criminal acts (like car theft) of person B, unless person A assisted, planned, facilitated, or otherwise participated in the criminal act (for example: allowed, or even hired, someone to steal his or her car so he or she could put in a fraudulent insurance claim).
Secondly, and crucial, the owner has to establish that it was theft. This will invariably require filing a police report for theft as soon as the fact that the car is missing is discovered; and then being willing to press charges against the car thief, if he or she is caught. If the car’s owner fails to report the theft, or refuses to press charges, it is highly likely that neither insurers nor the authorities (e.g. the police) will believe this was theft. That means that if the car was “borrowed without permission” by a family member (e.g., a child), the owner has to be willing to back that up, which can mean choosing between avoiding liability for the accident and damage on the one hand, and prosecuting a friend or family member on the other. If the car’s owner refuses to file a police report or press charges, that might be the right choice for him or her, or his or her family, but he or she needs to understand and accept that there will be consequences. He or she may be liable for what happened after the car was stolen.
Thirdly, even if the owner is willing to take legal action against the thief, the facts must support that the car was stolen. Permission to take a car does not have to be expressly granted each time. If the owner told a friend or family member that he or she can use the car whenever he or she wants, that general grant of permission will cover any borrowings, at least until the permission is rescinded.
Similarly, permission can be granted by actions as well as verbally. If the car’s owner knows that someone (e.g., a teenage child, or a sibling who lost his or her license) takes the car sometimes and doesn’t stop them from doing so, the fact that they allowed the borrowing will support a finding that the person had implicit permission to use the car. Therefore, the car’s owner will be liable for what happens next. This means that if you are not letting someone use your car, then don’t let them. Your words and actions must consistently support the fact that they are not permitted to use the vehicle.
Of course, even if the car’s owner establishes an unpermitted use or theft, that would only protect the car’s owner from damage to other cars, or injuries to other people. It will not, by itself, provide compensation for damage to his or her own car. If the car’s owner purchased collision coverage through his or her insurance, he or she can submit a claim to his or her own insurer for the car’s damage. He or she could also sue the person who took the car for damaging it, which would only help if he or she has money or other assets to pay for the damage. And if there was some third-party driver at fault (e.g., another driver who hit the car), then the car’s owner could also submit a claim to that person’s insurer and/or sue the at-fault driver for the damage.