By: Robert W. Bible, Jr., Attorney at Law
With high school graduation upon us, many of our kids will be heading off to college. If the school is not local, one of the conversations will no doubt involve transportation. Most likely, “someone” in the conversation might conclude, “I need a car”. From there, possible questions might be, “do we lend our child one of ours?”, or “do we buy our child a car?”.
In evaluating these choices, let’s consider some likely scenarios. 1. Billy meets Sally. Billy really, really likes Sally. Sally asks to borrow Billy’s car so she and a couple friends from her hometown can travel home for the weekend. 2. Billy is late for some activity. He is driving a little fast and texting his buddy to say he is on his way. 3. Billy decides to pledge a fraternity. Some of his frat brothers ask to borrow Billy’s car to go make a beer run. They decide to enjoy some of those beers while driving. Any one of these scenarios could result in an incident with serious consequences.
Considering the above scenarios, which option seems best for providing your child a car? A possible response might be, it doesn’t matter since the car will be covered by insurance. Suppose the option, “we will lend Billy one of our cars” is chosen. And suppose the scenario which occurs is while texting and speeding, Billy slams into a surgeon. And suppose the surgeon is killed in the accident. What if the insurance isn’t enough to cover the loss of life of this surgeon? Who becomes liable for any damages in excess of the policy coverage when the option chosen is “lend the child one of our cars”? The answer depends upon who owns the car. In Florida, an automobile is considered a “dangerous instrumentality”. As such, the parties liable for causing damage or injury while operating a motor vehicle are the driver, and the owner(s). Before parents hand over to a child the keys to one of their cars to head off to college, they need to understand they will be held liable for the actions of the child while using that vehicle, including actions of those to whom the child may give permission to use the vehicle. If one parent owns the vehicle, that parent will be liable. If both parents own the vehicle, joint liability arises.
Obviously, insurance coverage to shelter liability impact is a critical decision. There are ways to reduce premium costs, such as multi-car discounts, good student grades, and completing a driver education program. The objective of this column is not to discuss structuring automobile policies. But beyond issues of insurance coverage, the most important decision in arranging use of a vehicle for our college students is who owns the vehicle. If a child is age 18 or older, in most instances it is best for the child to own the vehicle. This prevents parents from being liable as owners. If the child is under 18, whichever parent already took on financial liability for vehicle use by signing the driver’s license application of the child should, in most instances, also be the owner of the vehicle to avoid both parents being liable. Decisions as to which parent signs a driver’s license application and becomes owner of a vehicle used by a child under age 18 should involve a review of the different property interests owned by each parent.
If you need assistance with structuring ownership of automobiles, or with the ownership structure of any other property interests, at Bob Bible Law, we have the knowledge and over 30 years experience to help you navigate these issues.