Getting into a car accident is always distressing, no matter the circumstances. If you were borrowing a friend’s car or find out that the other driver is not the vehicle’s owner, this can make an insurance claim even more complicated. Depending on the circumstances, the car insurance company may dispute liability on the grounds that the person driving isn’t covered. Learn more about car accidents with borrowed vehicles to better understand your rights.

What Is Permissive Use Insurance Coverage?

In auto insurance law, permissive use means that the policyholder gave permission to the driver to operate the vehicle. It refers to someone who is not listed by name or as a household member on the policy but had the owner’s permission to borrow the car (explicit or implied). Unfortunately for vehicle owners, permissive use is not always covered on an auto insurance policy.

Even if a policy does cover permissive use, it may only provide limited coverage or require a higher deductible on a claim. There may also be exceptions if the company covers permissive use. For example, many insurance companies do not cover the business use of a vehicle. If someone borrows your car to drive it for Uber, for example, your insurance company may not cover a car accident even if the person had your permission to use the car. 

Another common exception is if the person you lent your car to is unlicensed or inexperienced. Some insurance policies hold that for coverage to apply, the person operating the vehicle must be listed on the policy (a named driver). However, this type of insurance was banned in Texas, effective January 1, 2020. 

Named Driver Auto Insurance Policy Banned 

House Bill 259 banned named driver policies in Texas – a type of car insurance that was popular among drivers, as it was less expensive than a standard policy. This type of insurance only provides coverage to parties listed specifically on the policy. It does not insure anyone who is not listed, even if they are household members that live with the policyholder. With this type of insurance, an accident is only insured if a named party was driving.

As of January 1, 2020, House Bill 259 prevents named driver auto insurance policies from being renewed in Texas. This means that all drivers will have to choose standard policies that may or may not extend coverage to drivers who are not specifically named on the insurance plan. This rule decreases the odds of an insurance company refusing to provide coverage for a crash involving a borrowed car.

Who Is Liable if the At-Fault Driver is Using a Borrowed Car?

If you get into a car accident while driving someone else’s car in Texas, liability will go to the insurance company of the driver at fault. If the other driver caused the crash, his or her liability insurance will pay for your medical bills and property damage. 

It is important to carefully read the language of your auto insurance policy to figure out what is and is not covered before letting someone else borrow your car. You may need to discuss your car accident case with a car accident attorney in San Antonio if you or the other driver was borrowing a car at the time of the crash, and you suffered serious injuries and property damage. This may complicate your insurance claim and make it more difficult to receive fair financial compensation for your injuries and losses.