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Permissive User Status in Auto Insurance Liability

The question of whether a person is a permissive user of a motor vehicle under a standard auto insurance policy can be an important one in determining whether indemnity and coverage will be provided.car

This is usually of great interest to both parties in an injury lawsuit. The defendant wants to make sure they are going to have their legal expenses covered and not be personally liable for any damages awarded at trial, while plaintiff wants to make sure they have the best shot at actually recovering damages if they win. Most people do not have the personal wealth to cover these kinds of verdicts, so it’s usually in everyone’s best interest if the insurer provides coverage.

Different states have taken different approaches to whether permission is given.  There is express permission, in which a person just before that trip hands over the keys and says, “Here, use my car.” There are variations of this ranging from the initial permission rule (permission is initially given and coverage continues even though the user deviates from the original terms of use), minor deviation rule (user deviates to a small extent from the original terms of use) and conversion rule (vehicle has to be used in the scope of permission granted).

Another element that matters is the language of the insurance policy.

In a recent case before the Alabama Supreme Court, justices were tasked with considering whether a driver was a permissive user.

According to the court records, a vehicle owner added liability and uninsured/ underinsured auto insurance coverage for a pickup truck. Her son was listed as a rated driver for the pickup truck this was reflected in the rates and charges for coverage. The policy defined covered persons as the policy owner, family members, any other person using the covered car with the express permission of the policy holder or a family member. Occupants too were covered for purposes of UM/UIM coverage.

A few months after that policy was issued, another woman was driving the pickup truck when she was involved in an accident with a vehicle owned and occupied by plaintiffs. Both plaintiffs suffered personal injuries as a result of the crash.

Plaintiffs’ auto insurer sued the at-fault driver for negligence and wantonness, seeking recovery of damages for plaintiffs’ vehicle. Later, plaintiffs sued the driver and the owner of the car, alleging wantonness and negligent entrustment.

At-fault driver filed an answer asserting she was covered under the terms of vehicle owner’s auto insurance and therefore, it was the insurer who should provide a defense in both actions.

Vehicle owner’s insurer then filed a complaint seeking summary judgment, declaring the policy didn’t require it to defend either lawsuit or pay damages. Plaintiffs’ insurer and plaintiffs filed a motion finding vehicle owner’s insurer was required to cover the accident. Trial court denied those motions.

The issue was whether the at-fault driver had the express permission of either the vehicle owner or the listed drivers on the policy.

The state supreme court ruled defendant did not have the express permission of the owner of the vehicle, and therefore, the crash was not covered.

Call Associates and Bruce L. Scheiner, Attorneys for the Injured, at 1-800-646-1210.

Additional Resources:

Grimes v. Alfa Mutual Ins. Co., Jan. 27, 2017, Alabama Supreme Court

More Blog Entries:

Gilliam v. Immel – Proof of Damages Key in Injury Lawsuits, Jan. 31, 2017, Car Accident Lawyer Blog