A. As to liability coverage
Normally, a friend who does not live with you and is not listed on the policy as a driver, will qualify for coverage as a permissive user. A permissive user is someone to whom you have given explicit or implicit permission to drive a vehicle listed on your policy. Explicit permission is what you think of when you think of the word “permission”. That is, you have told the friend that he or she may drive your policy vehicle. Implicit permission basically means that your friend had access to the keys and because he had access, he qualifies as one to whom you have given implicit permission to drive your car.
Some insurance companies will reduce the liability limit for a friend who uses your car with your permission from whatever your liability limit is to the minimum level of 15,000 for injuries per person, 30,000 for the total injuries in an accident, and 5,000 (abbreviated as 15/30/5) 1 for all damage to the property of others caused by your friend in an accident. Most policies have the proviso to drop down liability rates for a permissive user but not all companies apply that proviso. So, depending upon your insurance company, your friend may have the same limits applicable to him as you do. By example, say you have 50/100/50 liability limits and your friend qualifies as a permissive user. If your policy enforces a drop-down liability coverage, then your friend will only be protected up to 15/30/5 in California. But you, as the policyholder, or as a listed driver on the policy, always have the same liability rate for which you paid a premium. So your liability rate remains at the 50/100/50 level for any possible imputed negligence you might have.
Imputed negligence is an activity done by another that you may be partly responsible for. For example, if you let your friend borrow your car, knowing that he has multiple tickets and accidents caused by his own negligence, say, speeding or running red lights, then you may be found to have negligently entrusted the use of the vehicle to your friend, knowing that he has a tendency to speed and ignore traffic signals. Your friend’s negligence then can be partially imputed to you on the basis of negligent entrustment. Or, if you see that your friend is drunk but give him the keys to your car anyway, you will be vicariously liable for any damages he causes as a result of driving while under the influence and your higher limit of liability will come into play. This is another example of negligent entrustment.
Another way that you may become responsible for an accident which occurs while your friend is driving the car, is by negligently maintaining the vehicle. For example, say you know the car needs new brakes. The pads are thin and the breaks squeak whenever you use them. If you give permission to a friend to use the vehicle under that condition, you will likely be found to be liable by the cause of negligent maintenance. Under both conditions of negligent entrustment and negligent maintenance, your policy limits will open up for your part to the full amount of 50/100/50.
(1.). 15/30/5 is the minimum liability limit for private passenger autos and pick-ups in California. Other states vary.
It is always a good idea to read your policy before letting someone else drive the car. If you do not understand your policy, ask your agent to explain it to you. Most policies are now much easier to read than they were in the past but still they can be difficult to understand for the lay reader.
B. As to collision and comprehensive coverages
Fortunately, Collision and Comprehensive coverage are broader as they apply to the policy vehicle regardless of who is driving it. Your collision or comprehensive coverage is a no-fault coverage so it works the same whether you or anyone else is driving it. If a friend borrows the vehicle, collision coverage will apply. If someone steels the vehicle, comprehensive coverage applies. The time that the collision and comprehensive cover ages will not apply is if the driver is specifically named as an excluded driver on the declarations page of your policy. In order for a driver to be excluded, most companies make you sign an agreement in writing that the particular individual is excluded. . Many companies will exclude drivers from coverage if they have a poor driving history as reflected by the DMV. Some will be so careful as to exclude children 12 and over just in case they decide to take the policy vehicle out for a spin.
If someone steels your car, the first thing to do is file a police report and report the theft to your insurance company. If you have Comprehensive coverage, the vehicle will be covered subject to the deductible and with repairs costing less than the value of the vehicle including the salvage value. If the vehicle costs more to repair than its’ total value, it is considered a total loss and the insurance company will pay you for the actual cash value (or market value) of your vehicle. This applies to collision-covered accidents as well whether or not you are at fault for the accident.
C. As to other coverages on the policy
MEDICAL PAYMENTS AND UNINSURED MOTORIST COVERAGES
So long as the driver had permission to use the policy vehicle, he and any passengers will be covered for medical payments and uninsured motorist claims due to injuries in the policy vehicle. For theft, these cover ages are not available to the one stealing the car or his passengers.
This is a coverage for the owner of the vehicle.
If this coverage is listed on the policy, it is probably available for permissive users just as it is for those who are listed on the policy as drivers. Check with your agent to confirm this as some companies have different provisions.