There are actually two theories. First, permissive use and second, negligent entrustment. The first theory, permissive use, says that an owner of a vehicle is automatically liable for up to $15,000.00 in personal injury if a vehicle they own is driven by another and that driver gets into a car crash!
The second theory, negligent entrustment, is a bit more complicated. In this theory, if the person who got injured can prove that the owner knew, or should have known, that the person they let drive, was unfit to drive safely (i.e. dui’s, tickets, etc.), they may have to foot the entire tab on a personal injury lawsuit!
Both of these theories have some exceptions, exclusions and other factors but the moral of the story is, know who is driving your car and make sure you protect yourself if they crash into someone.