Most auto insurance policies in Texas allow drivers not included on the policy to drive the insured vehicle under an omnibus clause. This is called permissive use, with these drivers typically referred to as permissive drivers. In this blog post, we'll discuss what permissive use is and who is considered a permissive driver.
What is Permissive Use?
In Texas, the omnibus clause (also called the permissive use clause) is a standard provision in personal auto liability policies that extends coverage to anyone who drives your insured vehicle with your express or implied permission. This permission can be explicit (e.g., temporarily giving your car keys to another person for an errand), or implicit (e.g., a family member who routinely uses the vehicle). Once someone is given this permission, they are considered a permissive driver and become insured under your policy. Though permissive use is fairly generous in its applications, there are still a few limitations that are important to keep in mind.
What are the Boundaries of Permissive Use?
First and foremost, the primary boundary of permissive use is consent. Thieves and other individuals who take your vehicle without your permission are not permissive drivers. Additionally, permissive use does not extend to individuals who are specifically excluded from an auto insurance policy under a named-driver exclusion. Insurance companies use named-driver exclusions to exclude high-risk drivers from an auto policy, and it is important to note that there is no exception to the named-driver exclusion, meaning the excluded driver will never have any permission to drive the vehicle unless the named-driver exclusion is removed from the policy. If an excluded driver is in an accident while driving your vehicle, there will be no coverage/compensation offered by the insurer.
Finally, permissive use may not extend to individuals who routinely use the vehicle and live in the same household as the policyholder, yet are not listed as a named insured or listed driver under the policy. Permissive use is not a loophole, and insurers will often investigate the driver's frequency of use of the vehicle and place of residency. If the insurer finds the driver to be a resident of the same household as the policyholder yet is not listed as a driver or insured, there may be a coverage dispute. Because of this, it is recommended that policyholders add all resident relatives, roommates, and significant others who are likely to frequently use the insured vehicle onto the auto policy. It is important to review your policy to know your insurer's specific coverage requirements and who you need to include on your policy.
If you have any additional questions regarding permissive use, or if you are having issues with a coverage dispute, please do not hesitate to contact us.