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. For example, if you allow a friend to lend you your car, it's permissive use. You've given your friend permission to use your car. Your liability coverage generally covers the drivers listed in your policy, most household members, and permissive users.
Your liability insurance covers you when you drive your car and will likely cover you if you have an accident in a rented car. California's auto insurance law includes what's known as a permissive use repurchase program, so you can repurchase the higher limits for these drivers. The California Insurance Code, under section 11580.1 (D) Statutory Exceptions to Permissive User Coverage, allows the insurance company to include a limitation of coverage for permissive users to the state's minimum limits of liability (i.e., what is permissive use? In a nutshell, it's when you allow someone who isn't listed in your insurance policy, or a member of your family, to drive your car. Fault drivers often rely on liability insurance to pay for damages, which is why Illinois law requires car owners and drivers to have a minimum amount of liability insurance.
In no-fault states, you rely on your own insurance to cover medical bills and other out-of-pocket losses, regardless of who caused the car accident. As severe as these penalties are, they pale in comparison to the financial impact you could suffer if you have a car accident and don't have car insurance. The California insurance code does not require the insurer to limit coverage; therefore, companies may vary as to whether they limit liability coverage to the state minimum. A guide to understanding the basics of car insurance and the exclusion of drivers, and an explanation of what happens when you want to remove a driver from your car insurance policy.
In at-fault states, the driver who caused a car accident must pay for the other party's damages, including medical bills, car repairs, lost wages, and pain and suffering. An additional insured endorsement protects the insurance company from liability if its policyholder is sued by a person injured on someone else's property. Keep in mind that not all California auto insurance providers will force you to repurchase your higher limits of liability, but some auto insurers will extend their higher limits to others allowed to drive your car, permissive users, without being charged an additional fee. For more information on car insurance in Illinois, see the Illinois Department of Insurance's Auto Insurance Buying Guide.
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