Permissive use driver is someone who isn’t listed on the policy and not part of the policyholder’s household and drives the vehicle insured with the permission of the owner. Vehicle insurers normally require that everyone in driving age in the policyholder’s household should be notified, rated and included in the policy so they cannot be considered as occasional drivers, which are usually other drivers who don’t have regular access to the automobile insured.
Typically standard auto insurance policies provide coverage for such people who may drive the automobile on the off chance with the permission of the owner. However, you may have agreed to limit them to the ones listed in the schedule in return for lower rates or your insurer may have imposed limitations. Therefore, it is always recommended to check the exact position before assuming anything and letting people drive your car.
Permissive Use
Owner’s permission is very important. Car insurers may not cover the driver, who has taken the automobile without prior consent. Therefore, they may be liable for the damages they caused. If they have stolen the automobile they will have to face the legal consequences when they get caught. Vehicle owners aren’t usually responsible for accidents that happened when the vehicle was stolen but they can claim for theft if they have comprehensive coverage.
Also, insurers may not cover the driver if they use the vehicle for commercial purposes. Any personal use like going to shops or running a domestic errand would be acceptable. But they cannot carry paid passengers, machinery or any other equipment for business. So, you should ask why they need your automobile and what they are going to do with it.
Pay extra attention when a young person wants to borrow your vehicle, especially if it is a sporty automobile. There may be age restrictions, especially when the auto is considered high-risk. Furthermore, when somebody has frequent access to your auto you may need to include them in your policy. Occasional and frequent access are completely different things.
If you don’t have coverage for other people you may be able to arrange it temporarily. For example, if friends are coming over to stay with you for a while you can include them for that duration at additional premium. Actually, it would be better to tell the insurer about people who started living in your house even for a limited time, regardless of arrangements in place.
Auto Insurance Coverage
Typically, your car insurance policy covers permissive use drivers up to your policy limits. If your friend borrows your vehicle and causes an accident in which there are third party injuries and damages, as well as damages to your automobile, your vehicle insurance policy may pay for injuries and damages up to your liability limits. Once the limits are exhausted, the driver would be responsible for the remaining damages. In such cases, the permissive use driver’s own liability insurance may come in as the secondary policy and pay the remaining damages. Essentially, vehicle owner’s liability insurance would be the primary coverage even if a permissive driver caused the accident.
If you have Collision coverage, your automobile insurance may pay for damages to your own vehicle as well, even if it is caused by a permissive driver since the coverage is usually extended to them. But, there will be deductible to pay in case of collision claims. Permissive use drivers’ own auto insurance doesn’t normally cover physical damages to a borrowed car.
If a friend you lend your vehicle is involved in an accident but another driver was at fault, you may be able to claim your damages from the at fault driver’s insurance.
Insurance Requirements
Generally, the person you lend your auto to doesn’t have to have their own insurance, as long as your policy covers permissive drivers. That would be enough for them to legally drive your auto. However, you should keep in mind that if they cause an accident, your policy may have to pay and the claim would affect your premiums going forward. Furthermore, permissive use rules may vary significantly between insurers and states so you should always read your policy document or consult with your insurer before letting people borrow your automobile.