Auto Insurance Coverage for Permissive Users

Auto Insurance Coverage for Permissive Users

If a motor vehicle driver had permission to use an insured vehicle and has an accident, the vehicle owner’s automobile insurance policy may provide coverage. The permission had to be given by a named insured on the policy. The permission could be either express or implied. The permission had to exist at the time of the accident.

There are different types of permitted drivers. A first permittee is the driver who received the named insured’s initial permission to drive an automobile. A second permittee is a driver who received permission to drive the automobile from a first permittee. And, a third permittee is a driver who received permission to drive the automobile from a second permittee. To prevent an unending string of permitted drivers, some insureds limit permission to a first permittee.

A parent who allows a child to take the car with a warning that no one else can drive it is limiting the express permission to use the car. However, if an emergency occurs, like the child becomes unable to drive the car, an implied permission to a third person to drive the car could arise. The issue would be whether the second permitted driver acted reasonably under the circumstances. The implied permission ends once the emergency does.

A permissive user of an automobile is entitled to identical insurance policy protection as a named insured. Some insurance policies try to limit the coverage of non-family permissive users to the state’s statutory minimum amounts through a “step-down” clause. Coverage for permissive use can be limited by an insured and insurance company through an excluded driver clause. If, for instance, a parent does not want a child to use a car, the child could be listed in the policy as an excluded driver. Then, even if the child had been given permission to use the car in the past, the exclusion would revoke that permission. No coverage would extend if the child used the car and was in an accident.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.