You are both responsible. You are responsible because you are the owner and you should make sure that anyone who drivers your car is legal. Also the person who drove without a license is responsible because they didnt have a license which is illegal, and they dont have insurance, which is illegal. You may be the person they go after and you may find yourself having to sue the other person.
Answer
Your policy will probably not cover the event. Check in with your insurance agent.
If they had your permission to drive, then your insurance company should cover it. They should, however, check with their insurance company and also cover any out of pocket expenses to get it fixed.
Is the CAR insured? If not, it's not legal.
The driver is always responsible. It is the drivers obligation to verify insurance before getting behind the wheel. If you have insurance on another vehicle you may have some liability insurance covering YOU when you get in someone else's vehicle. Check with your agent.
It's going to be very difficult to claim that it's not the fault of the person who was breaking the law by driving illegally.
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Yes, you are still at fault. It doesn't matter whether or not they had insurance, you still hit their vehicle and are therefore still responsible for their damages.
the driver will get caught go to jail and pay a fine
Yes. All cars on the road have to be insured. If you have a learners permit, then you need to be driving with someone who does have their license and is insured.
tort law
Absolutely, this person can and will sue you. Just because he/she wasn't licensed doesn't mean that you have the right to get in an accident with him/her. The only thing that will happen to the other person is get a citation for driving without a license, or whatever the case may be. You are still responsible for all damages.
license......a business permit issued by a city or county government. The term bonded or insured is basically the same thing. Bonded usually applies if someone handles money or other valuables.
Until an expert car rental agent, or an insurance expert can improve the following answer, it will have to be from the standpoint of a layman who occasionally rent vehicles. When you sign a rental contract, you agree to be responsible for any and all damages to the rented vehicle. As I have always had insurance on my vehicles, it will pay for losses for which I am responsible, but only if there is no other insurance in force. In the event that someone else is legally responsible for the damage to the loaner car, then it may be that with luck, they are insured, and their insurance carrier will pay for the damage. BUT, if they don't, the rental agency will continue to hold you personally responsibe.
If you're responsible for the accident, you're still responsible even if the other person hasn't got a driver's license.