Is policyholder liable if person on policy causes auto crash?

Depending on the type of policy, the policyholder may be liable for the driver of the vehicle. Parents are always responsible for their minor children if they cause an auto crash.

Free Auto Insurance Comparison

 Secured with SHA-256 Encryption

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

Full Bio →

Written by

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like and Safeco. He reviews content, ensuring that ex...

Full Bio →

Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Here's what you need to know...

  • Depending on your type of policy, you may be liable for other drivers of you car
  • Parents are always responsible for their minor children
  • New York is a no-fault state

One of the most common questions people ask before adding other drivers to their auto insurance revolves around whether or not a policyholder is liable if one of those other drivers causes a car accident.

Assuming that all the drivers on a multiple-driver policy are directly related, sorting out this type of scenario is fairly easy.

But when additional drivers are extended family members or even friends, it becomes much more difficult.

You can get an idea of what auto insurance rates are in your area by entering your zip code below!

Does it matter who those other drivers are?


In one sense it does, in another sense, it doesn’t. For example, if you’re talking about a minor child then yes, the policyholder would ultimately be liable if that minor child was guilty of causing an accident.

Any auto insurance claims made against the policy that aren’t covered would then become the responsibility of the adult policyholder.

If the child is no longer a minor, a court may find him liable and let his parents off the hook.

If the other driver is a spouse, he or she would be legally liable for any accidents caused. A claim would still be filed against the original policy, but anything not covered would become the responsibility of the spouse.

This can also get dicey in the case of couples who are separated or going through a divorce. Depending on the court that handles the auto accident claim, the policyholder or may not be liable depending on how he views the divorce proceedings.

If the other drivers are extended family members or even friends, liability almost always has to be determined by a court.

The court will take into consideration the age and relationship of the other driver, where he or she lives, and the likelihood of that driver being able to satisfy claims.

In reality, because this process can be so convoluted it’s recommended that you never add drivers to your policy who are not immediate family members living in your home.


Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

How does a state law apply?

State law comes into play here in several ways. First of all, in a no-fault state like New York, this issue is almost always irrelevant.

That’s because no-fault states do not assign blame to drivers in a legal sense.

Insurance companies work out issues of blame with each other based on police reports and together they settle any claims that arise from the accident.

The only time you would see a court case in a no-fault state is in a separate negligence suit that might be filed against a driver by his victim.

In fault-based states, where insurance claims are paid only after a court determines legal blame, the issue of additional drivers becomes very important.

As to how those individual drivers would be held liable, you can pretty much follow the examples given above. 

The last thing to consider where the law concerned is whether or not your state even allows you to add people to your policy. In some states, you are only allowed to include immediate family members living in the same household.

Other states are much more liberal and allow you to add extended family and friends. Yet even in a more liberal state, you should probably look long and hard at the possibilities

What if the policyholder is held liable and can’t afford to pay claims?


The policyholder who finds himself in this position will have no choice but to find some means to pay claims. Many homeowners carry umbrella coverage for this very reason.

With umbrella coverage, you have an insurance policy that covers you against all the great “unknowns” that your other insurance policies don’t address.

If you don’t have umbrella insurance, you can probably work out a settlement with the court where your wages are garnished a certain amount every week until the debt is paid off.

If your income situation is such that you can’t even afford to do that, it is possible the court would order the sale of your assets in order to pay outstanding claims.

Before you add new drivers to your policy, take a look at auto insurance rates online by entering your zip code now!



Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption