In a previous blog we discussed California law regarding permissive users. As already explained, a permissive user is someone not listed on an insurance policy but is a person that we gave 
permission to use our vehicle. This is a person who does not live with us and does not use the vehicle frequently. Additionally, for permissive drivers to be covered, the insurance policy must not contain an exclusion prohibiting all ‘permissive users.’ Consumers should clearly understand not only who is considered a permissive user but who is NOT considered a permissive user so that they do not have problems with their insurance carrier.
It is also important to remember that insurance follows the owner of the car and not the driver of the car in California so good judgement needs to be used when loaning out your car.
Many consumers may have heard something about California law and permissive users and may get it into their head that their car is automatically covered irregardless of who drives the car simply because they purchased an auto insurance policy. This is incorrect. Consumers need to educate themselves as to who will not be afforded coverage by their insurance carrier. We can claim to our insurance company that the person was a ‘permissive user’ but they need to fit the test.
The test includes the questions: Does the person live in the home? Does the person use the car frequently? Is the borrower using the car for business?
A permissive user is not a minor child living under our roof. Policies typically carry a clause stating that any person living in the home over the age of 14 must be either added or excluded from an insurance policy. The clause usually states that if such family members are not listed on the policy, no coverage will be afforded. The lesson for consumers is to add to their policy, any and all minor children who may use our car and that live in the home. If not, parents must restrict their minor children from using vehicles despite the minor protesting that they now have their driver license or permit. Remember, just because they have a driver license does not mean they can legally drive our car unless they are listed on the policy. However, an adult child who lives outside the home with their own vehicle and insurance policy, will likely be considered a permissive user should they temporarily use our car while visiting us in our home.
A permissive user is not an adult child living under our roof. If we have adult children and/or their spouses living in our home, we need to add them to our auto insurance policy in order for the auto insurance to cover any damages our adult children cause while driving our car. Permissive users are NOT people considered to be residents of the home including adult children. While the adult child may have said to us that the move into our home was ‘temporary,’ and/or we keep telling ourselves the adult children living in the home are simply ‘temporary’, our belief is not a factor the insurance company will use to determine if the adult child is a resident of the home. If your adult child cannot prove they have any other residence and/or the adult child is receiving mail at our home, they will likely be considered a resident in our home by the insurance carrier. Adult children and in-laws need to be added to the auto insurance policy in order for insurance coverage to be afforded. Remember, insurance companies can access databases that indicate who is living at a home at any given addresses. These databases often list who is getting mail at the address and claims opened in the last seven years by individuals at that address. It is best to disclose all individuals in a home so that insurance coverage is afforded should they cause damage while using our car.
A permissive user is not a significant other or roomate living under our roof. If we have a significant other or a roommate who uses our vehicle, add them to the auto insurance policy. Remember that one car with two adult drivers will change the price very little, sometimes not at all, if the person we are adding has a good driving record. If each of you have a vehicle, it may be best to purchase a policy listing both cars with both drivers. In this way, coverage is in effect for you and your roommate/partner while at the same time providing you a multi-car discount. If you and your partner or roommate do not want to purchase insurance together, list each other on each policy if you plan on using or borrowing each others cars. Otherwise, be firmly resolved to not use each others cars as no coverage will likely be afforded.
A permissive user is not a person who uses our car frequently. In other words, we may think ‘they don’t live under my roof so I don’t have to put them on my policy.’ This is true if it is our neighbor who uses the car just once to go to the store or pick up their kids because of an unexpected situation. However, if the neighbor uses our car several times a week to do errands and/or had a standing schedule where they use the car on a regular basis to accomplish daily or weekly tasks, they are no longer considered a permissive user of the vehicle and should be added to the policy for coverage to be afforded in the case of an accident.
A permissive user cannot be an unlicensed driver. If a person does not have the legal right to drive, your insurance company may deny the claim, even if you expressly gave permission for the person to drive the car and even if they ‘fit the bill’ of what is typically considered a permissive driver. So, while it may not seem like the friendly thing to do, protect yourself. Ask (and visually verify if possible) that the person who is borrowing your car has a valid driver license.
A permissive user is not someone who borrowed the car from the person we loaned it to. The lines get blurry here buy claims can be denied if the person we lent the car to then lends it to someone else to drive. The insurance company can deem that this person was not a permissive user and we did not give this person permission and as such, may deem that no coverage as permissive user should be afforded. If you think the person asking to borrow you car will lend it to someone else, say no.
A permissive user in not someone using our car for their financial gain. Another words, if we loaned the car out to a friend just one time to go to work and our policy covers permissive drivers, no problem. But if we loan the car to a person, who then uses the vehicle as a Uber driver or while working for a pizza delivery person, no coverage will be afforded despite our giving them permission to drive our car. While the above may be obvious, we also need to be careful if the person using the car is self employed in some fashion is using the car is in the course of their business. No coverage will likely be afforded as a permissive user unless the auto policy on the car specifically allows for commercial use.
I’m Ed Smith, a Sacramento and West Sacramento Personal Injury Attorney. I have been handling cases for injury victims, for over 30 years in Yolo County and Sacramento County. If you have property damage questions, please feel free to call our office. You can also check our website which contains advice on property damage claims.
For a free and friendly discussion about your personal injury case, please call me at (916) 921-6400. I can be reached toll free outside of Sacramento at (800) 404-5400.
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