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What Is Permissive Use Car Insurance?

Permissive use car insurance is coverage that extends to a driver you have given permission to drive your car even if they're not a listed driver in your auto insurance policy. In other words, your insurer will cover your friend if they get into an accident while driving your car with your permission. While a permissive use clause is included in many auto insurance policies, its inclusion can depend on the insurance company and the type of policy you purchase.

Keep reading to learn more about permissive car insurance, its coverage level and its limits.

How Does Permissive Use Car Insurance Work?

You may have heard that car insurance follows the car, not the driver. In the case of somebody driving your car with your permission, even if not named in your auto insurance policy, this is true. Many car insurance policies have a clause that will extend coverage to a driver whom you allow to borrow your car. In some policies, this is called an "omnibus clause."

The permitted driver typically has the same type of coverage as you. If you have collision insurance, for example, then property damage to your vehicle may be covered if an accident occurs while the permitted driver is behind the wheel. The coverage limits, however, may be reduced depending on the insurance agency.

Permissive use auto insurance limits

A permitted driver is subject to the same limits enforced on you in your car insurance policy. Generally, these limits include (but are not limited to):

  • Certain recreational activities: Your insurance policy may not extend coverage for losses that result from some restricted activity, such as organized or competitive racing or off-roading. You may need to obtain specific coverage for certain activities if you want coverage.

  • Commercial activity: If your vehicle is borrowed for business use, such as a rideshare service or for transporting clients, your personal auto insurance coverage will not kick in. You will need to obtain a separate insurance policy for business use, which may or may not cover unlisted drivers, even with your permission.

  • Excluded drivers: Some people choose to exclude a household member in their auto insurance policy — your 21-year-old child with a DUI conviction and multiple speeding tickets may be excluded to avoid increasing your rates, for instance. If an excluded driver suffers an accident in your vehicle while driving it with your permission, the accident won't be covered.

  • Unlisted cars: Insurers will not extend coverage (for you or the permitted driver) unless the vehicle is listed in the auto insurance policy. If you have multiple vehicles insured by different carriers, even within the same household, you will need to consult the insurance company for each respective vehicle.

Many car insurance policies have a clause that will extend coverage to a driver whom you allow to borrow your car.

Permissive Use vs. Adding a New Driver to Your Current Policy

Permissive use coverage should be used only for short-term and infrequent borrowing, such as asking a friend to run an errand. If somebody is driving your vehicle frequently and habitually, then you should strongly consider adding them to your policy. Generally, car insurance companies will want all household members to be included in your policy, as they have access to the insured vehicle. The exception is when your policy lists someone as an excluded driver.

If an insurance company finds that a driver is regularly driving your vehicle but is not listed in your policy, that may deny coverage. Worst case, your policy may be voided for misrepresentation.

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How Much Does Permissive Use Cost?

Permissive use coverage isn't a separate coverage you buy, like comprehensive or collision — it is already built into your premium. Generally, the average cost of car insurance will include coverages for a permissive driver. Car insurance rates in the U.S. costs $1,450.92 per year, on average.

How Do You Prove Permissive Use?

There may be some instances in which your insurance carrier may require you to prove permissive use before approving a claim. Generally, permissive use is demonstrated by express or implied permission:

  • Express permission: You provide explicit permission to somebody to drive your vehicle. For example, you're moving houses and you permit your friend to drive your vehicle while you drive a U-Haul.

  • Implied permission: This type of permission is generally used when a permitted user has been allowed prolonged access to your vehicle without needing express permission each time. A mother, for example, may allow a hired nanny to drive her vehicle to pick up her children whenever she is on a business trip.

If an insurance company finds that a driver is regularly driving your vehicle but is not listed in your policy, that may deny coverage.

Which Insurance Companies Provide Permissive Use?

You will find that many national carriers write a permissive use clause in their auto insurance policies, including Allstate, State Farm, Liberty Mutual and Farmers. However, you should always ask and confirm with your insurance agent. Be sure to read and understand your policy's terms and conditions or consult an agent to clarify any confusion.

Permissive Use Car Insurance FAQs

What does a permissive user mean?

A permissive user is somebody to whom a car owner gives permission to drive their car. If the permissive user gets into a serious accident, losses are typically covered by the car owner's insurer if they have a permissive use clause in their policy. While many auto insurance carriers provide coverage to permissive users, you should double-check with your provider.

Is permissive use standard on all auto insurance policies?

Today's car insurance policies will typically have a clause that will extend coverage to those who drive your vehicle with your permission, but you will always want to double-check with your insurer. Coverage on named driver policies does not extend to permitted drivers. A named driver policy will only cover drivers explicitly listed in your auto insurance policy — typically the policyholder, spouse and other household members.

What is implied permissive use?

Implied permission means that the policyholder allowed somebody else to drive their car but did not provide explicit permission each time it was driven. For example, the car owner arranges for his best friend to teach his son how to drive using his car — permission may not be explicitly given before each lesson but it is implied.

What is permissive user limit of liability?

Permissive user limit of liability is the level coverage the insurer will extend to a permissive user. Some insurers may cover a permissive user up to full coverage limits, while other insurers may provide reduced coverage if a permissive user gets into an accident.

Does insurance cover an unauthorized driver?

If an unauthorized driver uses your vehicle — if it's stolen, for example — then it would be considered theft and would be covered if you have comprehensive coverage.

If an excluded driver suffers an accident in your vehicle while driving it with your permission, the accident won’t be covered.

Get a Car Insurance Policy That Works for You

If you plan to let others drive your car, you'll want to ensure you're adequately protected by reading the terms of your policy and glancing at your exclusions list. It may be time to revisit your car insurance and shop around for a policy that better reflects your coverage needs and budget. SmartFinancial can help you save up to 40% on auto insurance costs. Based on your answers to a quick questionnaire, you'll receive free car insurance quotes. Just enter your zip code below to get started.

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