Permissive use: Permissive use car insurance applies to anyone who has permission to drive their car. If this person has an accident, they should receive the same protections that you would get from your car insurance policy. In most cases, a friend you let use your vehicle is also covered by your car insurance policy. The “permissive use” provision covers those who may borrow their car from time to time.
Some policies that cover permissive use may only offer limited coverage for permissive users or require higher deductibles if a claim is filed for permissive car insurance. Even if your insurance policy covers permissive users, it may not cover you if your car is used for commercial purposes, unless your policy includes a specific approval for business use. In most states, your car insurance doesn't automatically cover all traffic accidents involving your vehicle. Permissive use in an auto insurance policy means that you authorize a person who is not specifically covered by name or as a family member to drive your car.
Most auto insurance companies require that all members of the household and the regular operators of the vehicle be listed on the insurance application. Therefore, before you lend your car even to your best friend, you should take a close look at your insurance policy to see exactly what coverage it offers in situations of permissive use. The terms of the policy and state laws vary, but your car insurance typically covers the drivers listed in your policy, most household members, and permissive users.