Ask an Agent
Have a question? We're here to help.
Ask an agent for free
Question

Can lienholder be responsible in car accident?

I own a car and have it in my name. I am selling it to a friend with a loan with monthly payments and a contract. The friend has comprehensive and collision and state minimum liability. I am a little worried about the liability. If he is in an at-fault accident and exceeds his limit, do I the owner of the car become responsible? Can they sue me?

Jan 12, 2019 Cincinnati, OH

Answer
Author profile picture

Ava Lynch

Insurance Analyst

Credentials
  • 7+ years of Experience in the Insurance Industry

Ava joined The Zebra as a writer and licensed insurance agent in 2016. She now works as a senior insurance contributor, providing insights and data a…

If you keep the car registered in your name, there is a possibility that you could be held liable for damages that exceed the driver's policy. It is not common, however, there is still a chance. If you do let your friend take over the payments, make sure you are listed as an additional interest on the policy. This means you have a financial stake in the vehicle. Also, check with your finance company. They may require you to be listed as a driver on the policy that covers the car. Good luck and if you have any questions, don't hesitate to ask.

Ask an Agent
Have a question? We're here to help.
Ask an agent for free

Insurance is complicated, but it doesn't have to be.

The Zebra searches all of the top insurance companies, in one place, so you can compare the cost and coverage you need to protect your car, home and other property.

Step 1: Tell us a little about yourself

Choose an insurance product and enter your zip code to get started.

Step 2: Sip your coffee while we find the best quotes

Enter the necessary information and then sit back while we find quotes from 100 top insurance carriers.

Icon Fill Form

Step 3: Compare your quotes

Compare quotes side-by-side to find the right match for you, whether it's home, auto, or more.

Icon Agent

Step 4: Let our agents do the hard work for you

Once you pick your policy, our agents are here to get you over the finish line. Then just relax and enjoy your savings.

Compare insurance rates today!

Location pin icon
No junk mail. No spam calls. Free quotes.

Related Questions

Other people are also asking...

Can I suspend insurance on a vehicle I am financing?

The short answer is no for two big reasons. One; that's not how insurance works. Two; financed vehicles must be insured at all times. Let's explore more. You can not temporarily cancel an insurance policy - it simply doesn't work that way. It's either active or inactive. Now, ha…

Can my son insure a vehicle registered and with a loan in my name

The tricky aspect about this has to do with the loan and registration. Because the vehicle has a loan in your name, you will most likely be violating your loan contract by not having the insurance policy written for you. Moreover, because the vehicle is registered to you but not insured by you, you…
Jun 16, 2018 Stanley, NC

Does renters insurance cover hotel stay if my air conditioning system goes out?

Typically, your renter's policy will not cover your hotel due to your air conditioner being out. A broken AC is not considered the loss of use of the dwelling (home) — they typically only pay for other accommodations when the entire dwelling is uninhabitable. I recommend you check out our guid…
Jul 29, 2019 Cincinnati, OH

Do I need a police report to file a claim with insurance if I damaged my own vehicle?

You do not need a police report to open a claim. Since it was a single-vehicle accident, you will be charged as at-fault if the claim is paid, which would result in a higher premium. I would get an estimate for the damage and see if it's worth filing a claim for, and possibly pay out-of-pocket…
Jan 16, 2020 Hillsboro, OH