Permissive Drivers: Whose Insurance Applies?

September 28, 2012,

At some point in time, almost everyone has allowed a friend to borrow their car. A question that many people do not know the answer to is what happens if the person borrowing your car gets in an accident and it is their fault? Who is ultimately liable? Will my auto insurance cover the damages, or is the person you allowed to borrow your car responsible?

First and foremost, auto insurance follows the car. This means that even though your friend was driving your car, your auto insurance will cover the costs of damages, provided you gave your friend permission to use your car.

Additionally, under Pennsylvania law, typically members of your household are covered under your insurance policy when they drive your car, regardless of whether or not the household member has been given express permission to borrow your vehicle. It can be inferred that members of your household have implied permission to use your vehicle. However, if you explicitly tell a member of your household that they do not have permission to use your vehicle, then the insurance carrier can disclaim coverage on the basis of non-permissive driver.

As the owner of the vehicle, you can be found liable for negligent entrustment of the vehicle if you know the person you gave permission has propensities for bad behavior. For instance, you know your is drunk, but you let them drive anyway, you can be personally liable if they injure someone.

When renting a vehicle from a rent-a-car company, keep in mind that the person listed as the driver on the rental contract is the only person with permissive use of the rental vehicle. If you are going to have more than one person driving the rental vehicle, it is essential to let the rental car company know and list that person as a driver. Since the owner of the rental car is the only one who can give permission to drive the vehicle, the insurance carrier can disclaim coverage for non-permissive driver.