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What Does Your Auto Insurance Really Cover?

    3 minute read

    Knowing What is Actually Covered by Your Auto Insurance Policy

    The term coverage refers to the types of events a policy will provide compensation for, or the amount of compensation one will get in the event of an insurance claim. With auto insurance, coverage commonly refers to the policy limits and/or the minimum levels of insurance as required by law.

    But what is the scope of coverage of your current auto insurance policy? More specifically, whom and what do your policy cover?

    Auto insurance is intended to cover the owner of a vehicle and its principal drivers as well as passengers. However, some people do not always drive the cars they own, and many people frequently lend their vehicle to others. Scenarios such as these may include:

    • A dependent child who attends college out of state but wants to get around while home on holiday break.
    • A parent who is visiting from out of town who wants to go shopping.
    • A brother who wants to borrow a pickup truck to move some furniture to his new apartment.
    • A neighbor who needs to take her child to school, but her car won’t start.
    • A fellow member of a volunteer group who needs a minivan to transport supplies to a fundraiser.
    • A co-worker who goes on a long business trip with the car owner and offers to share driving responsibilities.
    • A friend who needs a sport utility vehicle to pull a boat on a trailer to a storage facility.

    Are any (or all) of these individuals covered on a vehicle owner’s auto insurance policy?

    Permissive Use

    Although every policy is different, many of them allow for coverage in these situations under what is known as a permissive use clause. This part of an auto insurance policy usually provides coverage for these drivers in the event of an auto accident. However, such policies usually have limitations or restrictions regarding the permissive use coverage they provide.

    As the term implies, permissive use only applies to drivers who have stated or standing permission from the policyholder to drive the insured vehicle. So if your neighbor takes your car without your permission and gets into an accident, your policy will likely not cover the damage or injury he causes. In an auto theft scenario, your policy would likely cover any damage to your vehicle, provided you carry comprehensive coverage. Your insurance company would then seek to recover the costs of the damages from the driver’s insurance policy or from the driver directly if he did not have an in-force policy at the time of the accident.

    Your insurance may also exercise their option to cover the damages your neighbor caused to protect you but, again, would look to recover those damages directly from your neighbor or his insurance company.

    man breaking into a vehicle
    He’s not covered under your permissive use policy…

    Also, permissive use does not provide coverage for drivers whom you have specifically excluded from your policy. For example, in order to save money on your premiums, you may wish to exclude a driver in your household who is a teenager, who has been convicted of a DUI, or who has had his/her license suspended for receiving too many speeding tickets. If one of these excluded individual’s drives your vehicle, your insurance carrier would likely not provide coverage.

    AIS Insurance can help find you an auto insurance policy that does include a permissive use clause. We can also answer questions about what constitutes permissive use and what restrictions may apply to a given policy. So if you think that someone else may occasionally drive your vehicle and want them to be covered in the event of an accident, contact AIS Insurance today and ask about permissive use coverage.

    This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverage’s in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.