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Permissive use car insurance is not an insurance policy but an agreement commonly found in most (but not all) insurance policies. Permissive use allows unlisted drivers to have insurance coverage while driving a policyholder’s vehicle. The unlisted driver must have the policyholder’s implied or expressed permission for the coverage to apply. Permissive use can have exceptions, exclusions and costly repercussions, so knowing if your insurance company allows permissive drivers and what it can mean to your policy is essential.
What does it mean to be a listed driver on a car insurance policy?
Before we dive into the specifics of a permissive driver, it first helps to understand who is usually covered to drive a car on an insurance policy. 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, known as the named insured, their spouse and their licensed children.
Licensed drivers living in your household are probably listed as drivers on your policy since they can access 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.
How does permissive use car insurance work?
Permissive use applies when someone has expressed or implied permission to drive the vehicle. Expressed permission is verbal or written, like when people ask, “Can I borrow your truck to pick up furniture?” and you reply, “Yes.”
Implied permission does not need to be spoken out loud and is generally based on past behavior, the relationship between the people involved or the lack of objection from the policyholder. Here are a few examples of implied permission.
- Your child drives to the store to get milk using your car since it is first in the driveway.
- Your roommate takes your car without permission to pick up a friend from the airport since you let them borrow the car last time.
- You see your uncle grab your keys to move your car out of the driveway so he has room to park.
Permissive use can apply to almost anyone. Whether expressed or implied, 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. Some companies specifically only cover drivers listed as “active drivers” on the insurance policy. Drivers who are excluded from your policy do not have permissive use. 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 are not excluded from your policy, 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 Texas car insurance laws require 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.
Frequently asked questions
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.
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.
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.