The question of whether an individual is a permissive user under the standard automobile liability policy can be difficult to answer. In some cases the facts will establish that express permission has been given by the vehicle owner. Once it has been determined that express permission has been given, the next question which must be resolved is whether there is any limitation on the scope of use that was communicated.
Various states have utilized different approaches for determining how far a permittee may deviate from the grant of permission and still be covered:
- (1) the initial permission rule, sometimes called the hell-or-high-water rule, where once an authorized insured grants initial permission to the permittee, that permittee is covered regardless of how grossly he or she deviates from the terms of the permission granted;
- (2) the minor deviation rule, where material deviations from the scope of permission are not covered but slight deviations are; and
- (3) the conversion rule, where the vehicle must be used within the scope of the permission granted.
Under the “initial permission rule” so long as the initial use of the vehicle is with consent any subsequent changes in the character or scope of the use does not require the additional specific consent of the insured. See e.g., French v. Hernandez, 875 A.2d 943 (N.J. 2005). Under the “initial permission rule” coverage is precluded only when the deviation from the use consented to amounts to theft or other conduct displaying an utter disregard for the return or safe keeping of the vehicle. See e.g., Barton v. U.S. Agencies Cas. Ins. Co., 948 So.2d 1267, 41,950 (La. App. 2d Cir. 2/7/07).
The initial permission rule can result in surprisingly broad findings of coverage. As an example, in Ferejohn v. Vaccari, 876 A.2d 896 (N.J. Super. A.D. 2005), an unlicensed driver was determined to be a permissive user of an unregistered vehicle that he had been given initial permission to use only in a driveway in order to complete repairs to the vehicle. When the individual drove the vehicle on a public street while intoxicated, the court found coverage because the deviation from permission was not theft or the like and the driver had continuous possession after his father gave him the keys and allowed him to perform the repairs.
Some jurisdictions use the “minor deviation rule” for determining whether a vehicle use is covered. Under the “minor deviation rule” permissive use exists if the use of the vehicle is not a material or gross violation of the terms of the initial permission. In order to determine whether a deviation from permissive use is material, an inquiry must be made into the extent of the deviation in terms of the actual distance or time, the purpose for which the vehicle was provided, and any other relevant factors. See, e.g., Tull v. Chubb Group of Ins. Cos., 146 S.W.3d 689 (Tex. App.-Amarillo 2004).
A few jurisdictions have adopted what has been called the “strict conversion rule.” Under the “strict conversion rule” once initial permission is given by the owner of a vehicle to a permittee, the permittee must conform to the time, place and uses specified or intended by the parties as of the time of granting such permission and the slightest deviation from the time, place and use restrictions will preclude coverage. See, e.g., Progressive Northern Ins. Co. v. Concord General Mut. Ins. Co., 864 A.2d 368 (N.H. 2005).
In determining whether permissive use exists by express permission, the following series of questions can be utilized in assisting with the coverage determination.
- 1. Was express permission given? If so, by who?
- 2. What was the purpose of the granting of express permission to use the vehicle?
- 3. What was the person doing when the accident occurred?
- 4. Where were they going?
- 5. Where did they come from?
- 6. Had they used the vehicle for that purpose before?
- 7. Did the use of the vehicle benefit the named insured or the additional insured? If so, how did it benefit the named and/or additional insured?
- 8. When was possession of the vehicle given to the person seeking coverage?
- 9. Was the possession interrupted during that time frame, and if so, by who and for what purpose was the use interrupted?
- 10. What was the scope of the permission given to use the vehicle?
During a claim investigation of “permissive use” it is not uncommon for an insured to say that they did not give permission to use the vehicle to the person seeking coverage. While that may rule out express permission, implied permission may still exist and should be explored during the claim/coverage investigation.
The consent required for implied permission comes from the insured or someone authorized to act on the insured’s behalf. See, e.g., Progressive Specialty Ins. Co. v. Murray, 472 F.Supp.2d 732 (D. S.C. 2007). Implied permission is determined from the facts and circumstances of each case and usually arises from a course of conduct over a period of time. See, e.g., Bituminous Cas. Corp. v. McDowell, 107 S.W.3d 327 (Mo. App. E.D. 2003). In determining whether implied permission exists, the following factors should be considered: past and present conduct of the insured; the relationship between the driver and the insured; the usage and practice of the parties over an extended period of time prior to the use in question. The usage and practice of the parties must be such that it would indicate to a reasonable mind that the driver had the right to assume he or she had permission under particular circumstances. See, e.g., Estate of Trobaugh ex rel. Trobaugh v. Farmers Ins. Exchange, 623 N.W.2d 497 (S.D. 2001).
The following questions may be used in this investigation:
- 1. What was the relationship between the parties?
- 2. What was the nature and extent of any prior use of the vehicle from which implied permission might arise (scope, duration, time, distance)?
- 3. If express permission had been given in the past, was that express permission interrupted by a withdrawal of permission for future use or future limitations on further use? It is important to establish if usage has changed over time in order to determine scope of implied permission.
- 4. Were others allowed to use the vehicle without asking for specific permission?
- 5. In the past, was express permission required before using the vehicle?
- 6. Did past usage of the vehicle require the named insured or a family member to be present in the vehicle at the time of use?
- 7. Were there any circumstances which led to the named insured or family member’s needing assistance in the use of the vehicle, i.e., intoxication with a designated driver?
Permissive use of an automobile typically cannot be implied when an express restriction has been placed on the scope of permission which prohibits the use at issue. See, e.g., Briles v. Wausau Ins. Cos., 858 N.E.2d 208 (Ind. App. 2006).
Plitt is a licensed insurance agent and an attorney with the Phoenix law firm of Kunz Plitt Hyland Demlong & Kleifield practicing in the field of insurance law. Tel: 602-331-4600. His column, Essentials, appears from time to time on www.ClaimsJournal.com and www.InsuranceJournal.com. For other articles by Plitt, see:
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