Owner’s Liability in Michigan: Don’t Loan Your Car Without Knowing Your Risk
"What I’d really like is to borrow the car keys, see you later may I have them please?”
- Harry Chapin, Cat’s Cradle
Does this simple conversation have legal implications? It does in Michigan!
As in most states, Michigan Law holds the OWNER of a car legally liable for the negligent acts of the DRIVER, under most circumstances. The three most important are (1) if the owner has given permission to take the car (2) if the driver is a close relative of the owner (implied permission) and (interestingly) if the owner knows that the car is being taken even though no permission has been granted.
What does this mean? If “Junior” in the Harry Chapin song, kills someone while driving Dad’s car carelessly, Michigan Law holds “Dad” responsible for any verdict. What if the verdict is larger than Dad’s insurance coverage? Then Dad is personally liable for the rest! In plain terms, he may lose everything he owns (except assets that are exempt, if he files bankruptcy). It can be a disastrous result from an everyday decision that probably involved little thought.
So, what should a car owner do to prevent this disastrous result? The most obvious answer is give careful thought before giving permission to borrow the car. With summer fast approaching, and college kids are returning home after the school year, ask if you are willing to be held responsible for your child’s carelessness. Is your child likely to drink and drive, drive excessively fast or engage in any other dangerous driving? Will she/he allow a friend to drive? Remember, once the keys are passed to the child, your liability begins—no matter who is driving.
What if someone takes the car without permission, but you KNOW it is happening. Call the police immediately—unless you are willing to be responsible for that person’s conduct.
Anything else you can do? Sure. Make sure your car is adequately insured. How much is enough? Talk to your insurance agent. But, in general, you can get a lot of coverage for not much more than you would pay for smaller limits. Consider buying at least $300,000 in liability coverage, and more if you can afford it. And while you are talking to your insurance agent, be certain to buy UNDER-INSURED motorist coverage. This is compensation for your own injuries, if a driver will small limits injures you.
What is the bottom line? Don’t loan your car without carefully considering what that may mean.
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