Is a car dealership liable to collect proper insurance for a vehicle they just sold before it leaves the lot?
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Is a car dealership liable to collect proper insurance for a vehicle they just sold before it leaves the lot?
This issue is one in Texas. In this issue, the purchaser did not have any insurance and was not insured. The dealership let the driver take the vehicle with no proof of liability insurance. In this case, how is the person involved in an accident able to recover any losses since therer was no insurance from t he purchaser of the new vehicle? I know that the insurance company of the other party had insurance and they would pay for damages, etc., but who pays for doctor bills, damages, or mental anguish in the future?
Asked on May 1, 2009 under Accident Law, Texas
Answers:
L.M., Member, California Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
If the purchaser of the vehicle was driving it and caused an accident, that driver is legally liable for the damage he or she caused to the other party's property as well as any injuries that incurred, regardless of whether or not he or she had any insurance. However, if the driver who was not at fault had insurance, he or she (as well as his or her passengers) would be entitled to make a claim with his or her own insurance company for both Medical Payments (to cover medical bills) and Uninsured Motorist (UM) coverage. UM coverage takes the place of the insurance the at-fault driver should have had and would cover those that were injured in the accident up to the policy limits for medical bills, lost wages, pain and suffering, etc. Then, the insurance company would attempt to "subrogate against" (get the money back from) the at-fault driver.
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