Legal Question in Insurance Law in California

My question is actually about liability. If an individual is on the registration of a car as legal owner, makes the payments and pays the insurance but the car is used exclusively by someone else who is no longer a part of the individuals life, what are the ramifications for that individual?

It is my nephew and his ex girlfriend but he is not listening to family and how to handle the situation and possilbe liability that could be incurred. He is more concerned about ruining his credit rating. I am more concerned about his liability, losing his home and future earnings.

An extremely concerned Aunt.


Asked on 1/26/10, 10:11 am

1 Answer from Attorneys

You are right to be concerned about liability. According to the fact outline you have provided, it is entirely his car and the ex is a permissive user. That makes your nephew jointly and severally liable for any accidents she gets in. On the other hand, if he is maintaining insurance on it, in an appropriate amount, he should be protected. What he MUST do, however, is make sure his insurance will cover this situation. Many policies only cover occasional permissive users. If someone other than the owner is the primary user, that person must be named as an insured on the policy and the premiums adjusted accordingly. If he has such a policy and doesn't make sure to get and keep the insurance coverages in order, they could deny coverage in the event of an accident.

This is an aside to your question, but I also wonder what his concern is about his credit rating. Why does he have to let his ex girlfriend have a car that he is paying for and insuring in order not to ruin his credit? That doesn't make any sense. Why doesn't he just take the car and sell it, or drive it himself?

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Answered on 1/31/10, 11:31 am


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