Every parent is going to face this question sooner or later. Most people realize that having a teenager will increase insurance rates. How many give any consideration to their own liability if your son or daughter causes a crash and injures several others?
In Ontario, if you loan your car to someone, you are responsible as the owner of the vehicle for all of the damage they cause to the same extent as if you were driving the vehicle yourself. If your teenager causes a crash that injures several people you may be personally liable for millions of dollars in payments. In certain circumstances, if you loan your car to your teenager, who then loans the car to another teenager (without your knowledge), you may still be liable for the damage caused by this unknown teen.
There are a few steps you can take to protect yourself. First, when your children are old enough to drive, you should consider increasing your liability insurance. Even the most responsible teen can cause a terrible accident. You will find that increasing your liability limits from the normal $1,000,000 to $2,000,000 is inexpensive.
You must also set strict rules with respect to when your teenager can drive the car. Leaving the keys on a hook in the kitchen with the understanding that your child will take the car only under certain circumstances is a bad idea. It is far better to keep control of the situation by speaking to your teenager each time before they want to drive. That way, you will be able to have a far better understanding of the circumstances each time your teen will be driving the car.
Having rules and keeping control of the situation is your safest option, for your teen and for other users of the road.