Blog Post
How to Reduce Your Exposure to Liability for an Auto Accident
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April 26, 2019
The Michigan No-Fault Act imposes tort liability for bodily injury on both the operator and
the owner of a motor vehicle. Therefore, the owner
of a motor vehicle is fully liable for bodily injury caused by auto accident, even if they were not driving when the accident occurred. By understanding this simple concept, you can reduce your exposure to liability for an auto accident.
Married couples can reduce their exposure to liability simply by titling each of their motor vehicles in the name of the spouse who drives it most often. If an accident happens while the spouse who owns the vehicle is also operating the vehicle, then the other spouse is not subject to liability. Therefore, by titling a vehicle in the name of only one spouse, married couples can effectively reduce their liability exposure by 50%. Of course, if one spouse is driving a vehicle owned by another spouse, then both of them will be liable for any injury caused to another person involved in the collision.
You might ask whether this makes any difference if both spouses' assets are subject to collection by a judgment creditor. However, Michigan law prevents judgment creditors from seizing a married couple's jointly-owned assets when only one
of the spouses is subject to a judgment. This law protects the "innocent" spouse from judgments of the other spouse. Therefore, by limiting potential liability for an accident to only spouse, a married couple can reduce the odds that their assets may be seized by a judgment creditor.
The same principle applies to any vehicle that you own which is frequently driven by another person (a child for example) -- removing your name from the title immediately reduces your exposure to liability for their actions.
Even if you change the title on your vehicle, your auto insurance will continue provide coverage up to the liability limits that you have purchased for insured members of your household. However, limiting your exposure to liability for an auto accident will reduce the chances that you are subject to a judgment in excess
of your insurance coverage.
By following these simple tips, you can reduce your exposure to liability for an auto accident at no cost. Nevertheless, it always makes sense to review your insurance limits and coverage with your auto insurance agent.
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