This question is more appropriate for a legal professional. But yes, in most states the parent of a licensed minor child has liability and financial responsibility for the actions of their minor child that is in a traffic accident. In many states in order for a teenager to obtain a driver's license a parent or guardian signs on it stating that they take financial responsibility for the child until they turn 18 and become an adult. This means having the proper insurance on the teen driver and being held liable for any damages the child may cause in an accident.
State laws do differ so if you want to find out if your assets are at risk by your minor child having a driver's license and operating a vehicle on the roadways, check with your local DMV or an attorney familiar with type of state law.
For instance the California Department of Motor Vehicles states that a minor's application for a driver license must have the signatures of:
- Both parents, if the parents are California residents and have joint custody, or
- Both parents, if divorced, with joint custody, or
- One parent, if that parent has custody, or
- Guardians of the minor, if neither parent is living or has custody, or
- The person(s) having actual full and complete custody, if no legal guardian is appointed.
Nonresident parents cannot sign the application form and cannot accept liability for a minor in California. Nonresident military parents stationed and living in California can sign the application form and accept liability for a minor.
When parents or guardians sign for a minor to get a driver license in CA, they are stating that they will accept financial responsibility for that minor. Financial responsibility in California requires that drivers and vehicle owners carry the following minimum monetary limits:
- $15,000 for injury or death of 1 person per accident
- $30,000 for injury or death of 2 or more persons per accident
- $5,000 for any property damage per accident
Evidence of financial responsibility must be carried at all times in the vehicle. Most Californians maintain financial responsibility through insurance companies, which provide the policy holder with an identification card to be used as evidence of coverage. The card must state the insurance company's name and address, the period of coverage, and policy number.
In CA and other states if the parent is also the car owner of the vehicle the child was using at the time of the accident then the parent would have vicarious liability again as the car owner. If you have a child that has a driver's license you should make sure you have insurance coverages with limits high enough to cover your personal assets. An umbrella policy may help you be able to do so better than just a car insurance policy on its own.
With an umbrella policy you list what items you want covered (i.e. home, boat, cars, motorcycle, etc) and then those listed items are underwritten and a rate is given for the premium to cover up to $1 million in liability. If you would like this coverage through CarInsurance.com, purchase your auto policy and then we can add the coverage. Both Safeco Insurance and The Hartford offer umbrella policies.