Most everyone has been in a situation where a friend needs to borrow a car to go shopping or borrow a truck to move. Friends are generally willing to help a friend out. That is what friends do. What happens if your friend is involved in an accident while driving a borrowed vehicle?
Insurance coverage and language varies from state-to-state and from one insurance company to another, so it is always important to know what the policy says before loaning a vehicle. Generally, insurance policies have some statement like the following:
The insured person "may include any person with respect to an accident arising out of that person's use of a covered auto with the permission of you or a relative."
So in reading this all that is necessary for the vehicle to be covered by the insured insurance, is the fact that "permission" to drive the vehicle was granted by the owner/insured. What happens when the vehicle is borrowed by a person who has no driver's license or has a history of reckless driving?
A friend might be making a terrible mistake by letting an unlicensed or reckless friend drive their vehicle. Negligent entrustment is the act of lending a car or other potentially dangerous object, like a gun, to a person who is incompetent, reckless, or unlicensed.
Five elements must be met to show negligent entrustment:
- The owner gave permission for the person the drive.
- The person had no valid license or had a history of recklessness and incompetence.
- The owner knew or should have known the person had no license or a history of recklessness and incompetence.
- The driver was negligent when the accident happened.
- It was the driver's negligence that caused the accident.
Negligent entrustment extends beyond friendship. The employer is responsible for their employees that use company vehicles, as well. Additionally, the offending object does not need to be a car; it could be a gun, boat, or RV. The fact that a person entrusted another person with something that needed to be handled with care and respect, knowing the person using the object was incapable for being responsible, makes the owner liable for any damages caused.
Even if the owner's auto insurance covers the actual damages of the accident, the punitive damages may not be covered. In Texas, there are occasions where insurance pays the punitive damages awarded by a jury. However, if the insurance refuses to pay on the grounds of negligent entrustment, the owner can have an unimaginable bill. Punitive damages are meant to punish the behavior, in the case of negligent entrustment, the punishment falls on the owner of the car, business, or gun. Even if the insurance will cover the punitive damages, they might exceed the limit on the insurance policy.
If you have been in an Austin car accident involving a borrowed vehicle, company vehicle, or unlicensed driver, contact an experienced attorney who can get you the compensation you deserve for the injuries you have suffered.