Your liability insurance protects you from the consequences of a lawsuit. Most people find that if the insurance policy covers all drivers and all cars it is much less expensive than having a young driver with her own policy.
The lawsuit is techically against the insurance carrier, so what does it matter who sues who?
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(Even if you are not filing a lawsuit this information can be useful).
Mr. Sarno is licensed to practice law in NJ and NY. His response here is not legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Sarno strongly advises the questioner to confer with an attorney in their own state to acquire more information.
I am a Maryland lawyer so you should verify that the law in your state is the same. To hold the parent of an adult child liable for a car accident the injured person must establish a theory of liability. Negligent entrustment is when a person entrusts a car to a person that is not safe to drive. If your daughter has had numerous prior accidents of a type that would suggest that she is a reckless driver or suffers from a medical condition that would render her unsafe to drive you could be held liable. These legal theories are difficult to prove and generally not applicable to most accidents. Another theory is respondeat superior, meaning that your daughter is acting as your agent or employee while she is using the car. This theroy is rarely applicable in your setting.
The fact that the vehicle's insurance is under your name would not establish an independent basis for liability. The only downside for having her under your policy is that if she has an accident your rates may go up.
The lawsuit is always against you, not your insurance company. The insurance company will step in to defend your daughter and/or you for damages, assuming that the accident is covered under the policy. However, assuming that the accident is either not covered or the damages far exceed the policy limit, the other driver may sue you and seek collection of your personal assets under the theory that you are an owner of the vehicle and that you negligently entrusted it to your daughter. But, in order to be successful, the other driver would generally have to prove that your daughter was a poor or unqualified driver and you entrusted your vehicle to her.
An auto insurance pollcy cannot prevent you from being sued; their obligation is to come to your defense if you do get sued. So, it seems that what you really want to know is, the second question: can you be held liable for your daughter's negligence. It depends on what you mean by "you". If the insurance policy is in your name, and if she is a named driver under that policy, if your daughter is negligent, your insurance company will negotiate with the party who files a claim, and if they can't come to a settlement that way, a lawsuit will probably be filed by the person who was damaged (making her the "plaintiff"). Because your daughter is the driver and the owner of the vehicle that is at fault, the "tortfeasor," they will probably sue your daughter, making her the defendant. But the insurance company--your insurance company--will provide her defense because as a named driver under your policy, she is insured. If the plaintiff wins a judgment, it is your insurance company that will pay it. And if any rates rise, they will be your rates, as owner of the policy. So, although you, as an individual, would probably not be held liable, it is your insurance policy that will be.
I hope this helps.
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