Written by attorney Allister Rex Liao

Lending Out Your Car in California? You May Want To Think Twice.

If you’re the Owner of a car, you should understand potential liabilities in California when lending your car to a friend. (1) PERMISSIVE USE LIABILITY In California, Owners can be liable for a car accident even if they were not driving at the time. The issue hinges on whether or not you gave permission (express or implied) to the person driving your car. Luckily there is a limit to the Owner’s liability. Liability is limited to $15,000 for a single person, or $30,000 for more than one person in a single accident. Property damage is limited to $5,000. Important Note: Your driver friend is still liable for any and all damages that result from his/her own negligent acts or omissions.

(2) NEGLIGENT ENTRUSTMENT On the other hand, there are no liability limits for a claim of Negligent Entrustment against an Owner. You could be liable for all damages that result from lending your car to a friend and they negligently cause an accident. Assuming your friend was negligent, the inquiry hinges on (1) whether you gave permission and (2) whether you knew (or should have known) that your friend was incompetent or unfit to drive.

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