Q.
A while ago, I gave my old car to a friend who was having financial difficulties and couldn't afford to buy a car.
My friend promised to get car insurance and change the title at the DMV himself, so I didn't file any paperwork with the DMV.
But three months ago, he got into an accident while driving the car.
It turns out my friend didn't insure the car as promised and didn't change the title at the DMV.
The other driver's insurance company is suing me for $20,000, but my friend says he can't take any financial responsibility.
Should I really be responsible for this accident when I didn't even cause it? I'm really shocked and upset.
A.
The insurance company of the victim of a car accident will hold the legal owner of the car liable for the accident, so
you, the legal owner of the car that caused the accident, are being sued for the accident.
Under the licensed driver law, if a car owner allows someone else to drive his or her car and
an accident occurs due to the fault of the person who rented the car, the insurance company responsible for paying for the injuries is the car owner's
insurance company, not the insurance company of the person who rented the car.
Also, if the car owner does not have car insurance, he or
she will be personally liable for up to $15,000/$30,000/$5,000 for personal injury/accident/property damage.
(Note that the person driving the car will only be liable for the amount above these limits.)
If you sell your vehicle to someone else, you must file a “Notice of Transfer and Release of Liability” with the DMV.
If a car owner sells a car or gives the vehicle away for free to another person, he or she
is legally required to file a Transfer and Release of Liability form with the DMV within five days.
Once all procedures are completed and the change is recorded with the DMV,
the person who later purchases the vehicle will be responsible for any parking/traffic violations and any car accidents.
Likewise, the buyer is legally required to report the transfer to the DMV within 10 days of the date the title was transferred.
If you signed over the title to the vehicle (“Pink Slip”), gave the vehicle to a friend, and
immediately filed a Release of Liability form with the DMV, you would no longer be the legal owner of the vehicle and
would not be liable for any accidents caused by your friend from the date you gave the vehicle to your friend.
However, because you believed your friend's words that he would file a Transfer of Ownership and Release of Liability form with the DMV and
did not file a Transfer of Ownership and Release of Liability form with the DMV, the DMV had no record of the transfer of ownership.
Therefore, you are still the legal owner of the car and as the owner, you are responsible for the injuries caused by the car accident.
Also, since neither you nor your friend had insurance, the only way for the car accident victim to receive compensation
was through their own uninsured motorist (UM) coverage.
And now the victim's insurance company is demanding that you, the owner of the car, and your friend, the driver, pay the amount they paid.
In conclusion, although you may be upset, you are still the owner of the car that caused the accident and therefore are legally responsible for the accident under U.S. law .
Now you have to negotiate with your plaintiff's attorney and consider suing your friend for breach of contract who verbally promised to take full responsibility for your car .
In order to avoid such unfair situations,
you should make it a top priority to submit documents related to the transfer of the vehicle to the DMV when selling or giving the vehicle to someone else.
You may also file a Notice of Transfer and Release of Liability online at www.dmv.ca.gov .
Q.
A while ago, I gave my old car to a friend who was having financial difficulties and couldn't afford to buy a car.
My friend promised to get car insurance and change the title at the DMV himself, so I didn't file any paperwork with the DMV.
But three months ago, he got into an accident while driving the car.
It turns out my friend didn't insure the car as promised and didn't change the title at the DMV.
The other driver's insurance company is suing me for $20,000, but my friend says he can't take any financial responsibility.
Should I really be responsible for this accident when I didn't even cause it? I'm really shocked and upset.
A.
The insurance company of the victim of a car accident will hold the legal owner of the car liable for the accident, so
you, the legal owner of the car that caused the accident, are being sued for the accident.
Under the licensed driver law, if a car owner allows someone else to drive his or her car and
an accident occurs due to the fault of the person who rented the car, the insurance company responsible for paying for the injuries is the car owner's
insurance company, not the insurance company of the person who rented the car.
Also, if the car owner does not have car insurance, he or
she will be personally liable for up to $15,000/$30,000/$5,000 for personal injury/accident/property damage.
(Note that the person driving the car will only be liable for the amount above these limits.)
If you sell your vehicle to someone else, you must file a “Notice of Transfer and Release of Liability” with the DMV.
If a car owner sells a car or gives the vehicle away for free to another person, he or she
is legally required to file a Transfer and Release of Liability form with the DMV within five days.
Once all procedures are completed and the change is recorded with the DMV,
the person who later purchases the vehicle will be responsible for any parking/traffic violations and any car accidents.
Likewise, the buyer is legally required to report the transfer to the DMV within 10 days of the date the title was transferred.
If you signed over the title to the vehicle (“Pink Slip”), gave the vehicle to a friend, and
immediately filed a Release of Liability form with the DMV, you would no longer be the legal owner of the vehicle and
would not be liable for any accidents caused by your friend from the date you gave the vehicle to your friend.
However, because you believed your friend's words that he would file a Transfer of Ownership and Release of Liability form with the DMV and
did not file a Transfer of Ownership and Release of Liability form with the DMV, the DMV had no record of the transfer of ownership.
Therefore, you are still the legal owner of the car and as the owner, you are responsible for the injuries caused by the car accident.
Also, since neither you nor your friend had insurance, the only way for the car accident victim to receive compensation
was through their own uninsured motorist (UM) coverage.
And now the victim's insurance company is demanding that you, the owner of the car, and your friend, the driver, pay the amount they paid.
In conclusion, although you may be upset, you are still the owner of the car that caused the accident and therefore are legally responsible for the accident under U.S. law .
Now you have to negotiate with your plaintiff's attorney and consider suing your friend for breach of contract who verbally promised to take full responsibility for your car .
In order to avoid such unfair situations,
you should make it a top priority to submit documents related to the transfer of the vehicle to the DMV when selling or giving the vehicle to someone else.
You may also file a Notice of Transfer and Release of Liability online at www.dmv.ca.gov .