Liability coverage under auto policies follows driver, not car

This week’s question comes from Bao in Union City, who writes:

Q: “Chris, I got into a car accident last week and broke two ribs. My sister was with me, and she suffered a concussion. The other driver ran a red light and hit us. I was driving my sister’s car, which was totaled. I found out after the crash that my sister doesn’t have insurance. The agent for the driver who hit us says that, since the car was not insured, he doesn’t have to pay for my injuries. I have my own car insurance policy. What should I do?”

A: Boa, I’m sorry to learn of the car crash. Given the injuries, I assume you and your sister went to the hospital right away. Keep in mind, though, that some injuries from a car crash may not manifest themselves until days after the collision. I recommend you and your sister see your doctors for follow-up visits to report and receive care for any additional pain, stress or anxiety you may be suffering.

You should also be aware that the California Vehicle Code requires the filing of a report to the DMV within 10 days of the accident. The report is called the Traffic Accident Report SR 1. It must be filed when there was property damage in excess of $1,000 or if anyone was killed or injured (no matter how minor). This report is required, even though you did not cause the accident.

Turning to your insurance question, the fact that the car you were driving was not insured raises the question whether Proposition 213 applies. In 1996, the insurance industry spent millions to pass the initiative. Insurance companies knew it would generate massive profits.

Here is how Prop. 213 works: If you were driving a car that was not insured at the time of the accident, Prop. 213 limits your recovery of economic damages — such as lost wages and medical expenses — and the diminished value of the car, if you were also the car’s owner. You are precluded from recovering noneconomic damages, like compensation for pain and suffering, disability, disfigurement and emotional distress.

Fortunately, certain exceptions to Prop. 213 exist. The initiative does not apply when:

– The car operator was driving his/her employer’s uninsured vehicle.

– The accident occurred on private property.

– The owner of the vehicle did not have insurance, but the driver who borrowed the car did have insurance for another car.

Bao, this third exception applies in your case. Liability coverage under auto policies follows the driver, not the car. If you had caused the accident, your auto policy would have protected you. This is key under Prop. 213: Since you have an auto policy that covers the vehicles you operate, your sister’s car is considered “insured” under the law. The insurance agent for the driver at fault either does not know the law or is trying to mislead you.

Moreover, you should let your sister know that she, too, is not limited under Prop. 213 to the damages she may recover. In Goodson v. Perfect Fit Enterprises, a case decided nearly 20 years ago, the plaintiff was a widower who brought a wrongful death action on behalf of his wife, who was killed when their van was broadsided by a truck.

The husband and his wife did not own an auto policy for the van. The wife, however, was not driving the van when the collision occurred. Instead, their daughter-in-law was driving van. The daughter-in-law owned an auto insurance policy that covered her while driving the van.

The Court of Appeal held that the financial responsibility requirement of Prop. 213 is satisfied if “the owner or driver has insurance that covers the driver for his or her operation of the vehicle involved in the accident.” Thus, the husband’s recovery was not limited solely to economic damages. He could also recover noneconomic damages for the loss of his wife’s companionship, comfort, attention and support.

Bao, I recommend you forward this article to the other driver’s insurance agent. I also recommend that you speak to a trial lawyer experienced in handling vehicle accident cases. Only by talking to an attorney who represents your interests can you obtain an accurate measure of the damages you are entitled to under the law.

Christopher B. Dolan is owner of the Dolan Law Firm. Email questions to

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