Legal Question in Insurance Law in California

Gave car to son had accident, we did not have ins. coverage any longer

I'm going to be more clear in my question. Thank you for your previous answers. I believe Phillip Cooke read my meaning correctly. I'm going to pose the question again just so I understand correctly.

QUESTION: We gave our adult son our car but had not changed the title for it, so the car was still in our name. Our adult son was driving the car and hit a parked vehicle. We made sure he had his his own insurance and a valid California drivers license before we gave him the car. We DISCONTINUED our insurance on the car. The damage to the other vehicle exceeded the amount that our son's insurance company would pay. The lawyer for the insurance company for the other vehicle has sent a letter to both us and our son, demanding the full amount for the repair of the other vehicle.

Are we, the parents who gave the car to our son, liable for the difference? We did not continue carrying insurance because we thought there was some kind of severability.

Thank you for considering this again.


Asked on 3/02/07, 4:51 pm

1 Answer from Attorneys
Kurt Boyd LAW OFFICES OF KURT BOYD

Re: Gave car to son had accident, we did not have ins. coverage any longer

No. As owner but not operator, your liability for property damage is limited by statute (Veh Code sec. 17151) to $5,000.00 and would be subsumed within the 1st $5,000.00 of your son's coverage. He may have exposure over his policy's coverage, but payment of that coverage would extinguish your liability.

The hang up may be that if the demand is in excess of his policy, the opposing counsel isn't prepared to settle for the policy limit. An insurer can only pay to completely settle a claim, or to offset a judgment after the judgment is entered based on trial.

As the owner you are a proper party defendant, but as long as your son has coverage, you are effectively insulated.

Read more
Answered on 3/16/07, 12:21 am


Related Questions & Answers

More Insurance Law questions and answers in California