More and more we in the family law field of practice are seeing custody or guardianship of children going to people other than their parents. Many children in Indiana are in the custody of one (1) parent or family member either as a result of divorce, being born out of wedlock, or the parent not being able to care for the child and leaving the child with a relative. This article is only meant to address one issue. Under Indiana Law, a child under 18 years of age must have an adult 18 years of age or older to sign for financial responsibility of that child in the case they are held liable for the operation of a motor vehicle. See IC 9-24-9-4 which says “(a) An individual who signs an application for a permit or driver’s license under this chapter agrees to be responsible jointly and severally with the minor applicant for any injury or damage that the minor applicant causes by reason of the operation of a motor vehicle if the minor applicant is liable in damages.”
This statute could result in liability you had not considered. For example, you take guardianship or third-party custody of your grandson, nephew, sister, cousin, etc. When that child applies for their driver’s license you take them to the Indiana Bureau of Motor Vehicles and sign for him or her to get their driver’s license. At that point, you are liable for “…any injury or damage that the minor applicant causes by reason of the operation of a motor vehicle if the minor applicant is liable in damage.” You might then say well I have car insurance. Unfortunately, that is not where the discussion ends. Many times, as occurred in Motorists Mut. Ins. Co. v. Wroblewski, 898 N.E.2d 1272 (2009), insurance agents recommend that you cover the young driver on a separate policy as many companies will not cover high risk drivers or the adding of a new driver increases everyone’s insurance costs. In the Wroblewski case, the grandparents had guardianship of their grandson. When the grandson turned 16 years of age, grandmother took him to the BMV to sign for his driver’s license. The grandparents then gave him a car which was put in his name alone. The grandparents purchased him car insurance with an insurance company different that the one that covered their vehicles. That same month grandson was involved in an automobile accident. Unfortunately, grandson was found at fault and the insurance that the grandson carried was not enough to pay the judgment. The injured party then filed to have grandmother pay the judgment based solely upon her signing for financial responsibility upon him getting his license. The trial court entered a judgment against grandmother for $99,422.19 plus court costs. The injured party then sued grandmother’s insurance to pay the claim. The Indiana Court of Appeals held that based upon the policy terms the grandson was excluded from coverage as he owned the vehicle and he had his own insurance. In plain terms, this means that grandmother would have to pay the entire $99,422.19 out of her pocket and her insurance did not cover her since her grandson and his car were not on her insurance.
The various ways you can be held liable are numerous. Another case to consider is what if the person you sign for liability loans their vehicle to an unlicensed or intoxicated driver? The court in Cedars, infra, ruled that when a daughter allowed an unlicensed driver to drive her vehicle and then there was a car accident injuring others the injured parties could sue the parent who had signed for financial liability of the daughter who was not driving. The court held that the accident arose out of the daughter’s negligence in allowing an inexperienced driver which resulted in a wreck. The court stated, “Accordingly, the trial court properly found that Linda Waldon can be jointly and severally liable if the jury finds Cherish liable to the Cedars on the theory of negligent entrustment.” Cedars ex rel. Cedars v. Waldon, 706 N.E.2d 219, 225 (Ind. Ct. App. 1999)
So, if you are or have obtained custody of a child, guardianship of a child, or just are asked to sign for a child’s driver’s license, you need to make sure you have the child and their vehicle insured and in an amount to cover your risk. If you have a change of custody, even if it is not approved by the court, and you have a driver, whether you signed for financial responsibility or not, you should consult your automobile and homeowner insurance agent. You should get your agent’s opinion in writing. You should also know for most policies if you have a relative who lives with you and they are not named on your automobile or homeowner’s policy they are not covered.
My next article will deal with other ways a parent or guardian be liable for the intentional and reckless acts of the child. Click here to read. http://ramlawoffice.blogspot.com/2017/09/grandparents-parents-brothers-and_25.html
Prepared by Richard A. Mann of Mann Law, P.C. Attorneys at Law, www.rmannlawoffice.com
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