When the Insurance Information Institute (Triple-I) set out to dispel the most common auto insurance myths, they addressed how car insurance applies if someone else wrecks your vehicle. They say that in most states and with most insurance providers, auto insurance travels with the vehicle, not the driver. So if a friend borrows your car and causes an accident, your auto insurer should cover the claim.
This is called permissive use car insurance. And it can help you rest easy if you’ve ever wondered, “Can someone else drive my car?” There are exclusions, though, so it’s important to know who, exactly, is a permissive driver and what that means.
What does it mean to be a listed driver on a car insurance policy?
Before we drive into the specifics of a permissive driver, it first helps to understand the main people a car insurance policy protects. These are the listed drivers, also called named drivers or named operators. For example, a family might have a policy with listed drivers including the primary policyholder, their spouse and their licensed children.
Licensed drivers living in your household are probably listed as drivers on your policy since they have access to your vehicle. Generally, when a household member borrows your vehicle, how they are covered does not apply under permissive use. To make sure household members are properly insured, review your existing policy with your insurance agent.
The details we outline for a permissive driver usually do not apply to anyone who lives at the same address as you, but rather when someone who does not live in your household is driving your vehicle.
How does permissive use car insurance work?
Permissive use car insurance applies for people who ask, “Can my friend drive my car?” As a permissive driver (i.e., someone with your permission to borrow your vehicle), they should get the same protections you get from your auto insurance policy. In other words, your auto insurance policy should travel with the car to anyone driving it.
Note that we say should. While most large-scale car insurance providers offer permissive use car insurance, some companies do not. Review your policy details, especially if you get coverage through a smaller insurance carrier, before handing over your keys.
Assuming your policy allows for a permissive driver, you should review the specifics there, too. For example, your auto insurance policy may only apply to someone who borrows your car 12 or fewer times a year.
Generally, permissive use car insurance is designed for those out-of-the-ordinary instances when another driver borrows your vehicle and gets into an accident. If someone is getting behind the wheel of your vehicle regularly, you usually need to name them as a listed driver on your policy. If the insurance company finds out someone who was not a listed driver was regularly using the vehicle, they could deny coverage in the event of an accident.
Does all of a car insurance policy apply to the permitted driver?
Assuming they do not live with you and only borrow your car occasionally, your friend has the benefits of your insurance policy when they borrow your car. Usually, the permissive user limit of liability, collision, comprehensive and any other coverages you have is the same as the limit of coverage you have for yourself.
Say you live in Texas, where the state requires you to carry at least a minimum of $25,000 property damage liability coverage. If you have $25,000 of property damage liability coverage on your policy, the permissive user limit of liability is also $25,000. So if your friend does $20,000 of damage, your policy should cover it.
In short, if your car insurance policy includes permissive use, the entirety of your policy extends to anyone driving your car (assuming they meet your insurance provider’s permissive driver requirements).
Should someone be a named driver or a permitted driver?
This comes down to how frequently you plan to loan out your keys. Usually, if someone borrows your ride a dozen or fewer times a year, they can be considered a permissive driver. But if your neighbor uses your car weekly to pick your kids and theirs up from soccer practice, you probably need to have them as a listed driver.
If you still feel unsure about when someone should be listed as a named driver on your policy, call your auto insurance provider and ask, “Can someone else drive my car x amount of times?” Talking through the specifics of your situation helps you to have the right coverage in place — and avoid a surprise out-of-pocket expense if your friend wrecks your car.
Remember, too, that if someone lives at the same address as you, they generally cannot be considered a permissive driver, no matter how rarely they borrow your car. You usually need to specifically name them as listed drivers for your car insurance policy to apply to them.
Frequently asked questions
Do all insurance policies include permissive use car insurance?
Most do, but some policies require all drivers to be named on the policy to get the protection the policy includes. Read your policy details to find out if you have permissive use car insurance. If you are unsure if and when your coverage extends to other drivers, call your auto insurer before loaning out your vehicle.
What is non-permissive use?
Permissive use car insurance assumes that the person behind the wheel of your vehicle has your permission. If your car gets stolen or a disgruntled individual takes your car without your consent, you generally will not be liable for any damages they cause. That means they cannot use your car insurance policy to cover the claim.
Will permissive use car insurance extend to my family members?
If they do not live with you and only borrow your car occasionally, they should generally be covered by your policy’s permissive driver coverage. But if they live at the same address as you (like a newly licensed teen driver), you need to add them to your policy for your coverage to protect them — and to cover expenses for accidents they cause.