Jill Kolodner | January 3, 2025 | Car Accidents
Loaning your car in Maryland could be a thoughtful gesture, or it could be an act of reckless abandon. In any case, it’s essential that you understand what might happen if the borrower causes an accident. This post should shed some light on the matter.
Maryland’s Mandatory Minimum Auto Insurance Coverage
Maryland requires all drivers with cars registered in Maryland to carry the following minimum auto liability insurance coverage:
- $30,000 per person for bodily injury liability;
- $60,000 total per accident for bodily injury liability (so if 10 people suffer injury, they must share the $60,000 even though each person will receive less than $30,000); and
- $15,000 per accident in property damage liability.
You can (and should) carry more than the mandatory minimum auto liability insurance. Uninsured and underinsured motorist insurance is particularly important.
Types of Use in Maryland
Understanding the different types of use when it comes to car insurance in Maryland is essential for both drivers and vehicle owners. Maryland law distinguishes between various situations where someone else may drive your car, and each scenario can have different implications for your insurance coverage and potential liability.
Permissive Use
You cannot insure someone else’s car in your name, but you don’t need to if you’re driving it with the owner’s permission and they have insurance on the vehicle. This is because auto insurance typically follows the car, not the driver. When you drive someone else’s car with their permission—or they drive yours—it falls under “permissive use” coverage, meaning the car’s insurance policy will generally extend to the driver.
Your insurance policy will typically extend to cover car accident losses caused by people driving your car with your consent. Nevertheless, it’s crucial to understand the limits and exclusions of your insurance policy.
Non-Permissive Use
Non-permissive use occurs when someone drives your car without your consent. That might mean someone uses your Ferrari to take a joy ride, or it might mean that a thief steals your car and wrecks it. If someone using your car without your permission causes an accident, your insurance might not cover the damages, leaving the unauthorized driver solely liable. You will not bear liability under such circumstances. The driver might face criminal charges.
Be careful about this, however, because Maryland applies the concept of “implied permissive use,” This might occur if, say, your teenager has easy access to your car keys and has used your car before.
Reasonable Entrustment
If you entrust the use of your car to someone with no accidents or tickets, there may be no reason to find you negligent. If the driver causes an accident, your insurance policy will generally cover any damages to third parties up to policy limits. If policy limits are insufficient to cover the damages, the driver’s insurance policy will cover the remainder up to its own policy limits.
Under these circumstances, you probably won’t bear liability, no matter how great the damages are. Nevertheless, your insurance company might raise your insurance rates simply because it was your car’s driver who caused the accident.
Negligent Entrustment
One way you might face car accident liability in Maryland is through the principle of “negligent entrustment.” You commit negligent entrustment when you loan your car to someone you know (or should know) to be an unsafe driver. In such cases, consulting a car accident attorney can help you understand your potential liabilities.
In the case of negligent entrustment, your insurance company will probably pay damages up to policy limits. This is not certain, however—it depends on the terms of your policy. The driver’s liability insurance will kick in if your coverage limits are insufficient. If that is still insufficient, you might bear personal liability. The victim might even sue you. In any case, your insurance premiums will almost certainly rise significantly.
The Good News: Maryland’s Strict Contributory Negligence Rule
Maryland is one of the few states that still applies a pure contributory negligence rule to car accidents. Under Maryland insurance law, even if you loan your car to someone who causes an accident, both you and the driver can completely avoid liability if you can prove that the other driver was even one percent at fault for the accident. Put another way, both of you can avoid liability for both personal injury and property damage even if the driver you loaned your car to was 99% at fault for the accident.
Talk to a Maryland Personal Injury Attorney If You Believe You Might Face Liability
Loaning your car in Maryland can be risky. By understanding Maryland’s concepts of permissive use, negligent entrustment, liability, and your own insurance policy, you can minimize your risk. Don’t risk your financial future. If you’ve been involved in an accident due to lending your car to someone else, contact WGK Personal Injury Lawyers today for a free consultation.
Contact the Baltimore Car Accident Law Firm of WGK Personal Injury Lawyers Today For Help
For more information contact the Baltimore car accident law firm of WGK Personal Injury Lawyers to schedule a free initial consultation.
WGK Personal Injury Lawyers
14 W Madison St, Baltimore, MD 21201, United States
(410) 837-2144
WGK Personal Injury Lawyers – Dundalk Office
7329 Holabird Ave Suite 3, Dundalk, MD 21222
By appointment only
(410) 970-3080
