An eye witness told OK! U.S., the 22-year-old crashed her Mercedes SUV into another car, flipping her vehicle while driving through Beverly Hills, California.
Beverly Hills Police Department officials told the publication Lori was arrested on suspicion of a misdemeanour hit and run, and delaying a police investigation.
"She was arrested for the two charges and released on scene. Not booked. She identified herself properly and signed a written promise to appear in court," an official said.
The witness claims Lori had been texting and driving before the smash and that the driver of the other car pulled her from her vehicle, before she attempted to flee the scene.
However, police arrived at the crash site soon after and made an arrest. She also reportedly FaceTimed her famous TV star dad to update him on the ordeal.
Lori has been romantically linked to hip-hop superstar Sean "P. Diddy" Combs, 49, over the summer, but the couple reportedly split earlier this month.