Am I liable as the lienholder on my daughter’s car?

UPDATED: Jul 3, 2009

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Am I liable as the lienholder on my daughter’s car?

My daughter is over 18 and making monthly payments on the $10k I loaned her to purchase a car. She is listed as the policyholder on her car insurance and I am listed as the lienholder. On the registration she is listed as the registered owner and I am listed as the legal owner. Is there any way I could be sued if she were to cause damages that exceed her coverage in the state of Washington? My Progressive representative assures me that I have nothing to worry about. He says that I am in exactly the same position as GMAC would be if they were leasing her the car and they could not be sued.

Asked on July 3, 2009 under Personal Injury, Washington


J.M.A., Member in Good Standing of the Connecticut Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

I am a lawyer in CT and practice in this ara of the law.  You are simply a lienholder/creditor.  You are not a leasing agent.  If you daughter gets sued then her insurance company picks up the damages pursuant to her insurance policy.  If she wants to list you as an additional insured she can, but there is no real point.  Progressive is right about you not needing to worry.  Just make sure that your daughter has car insurance on the car at all times!

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