If other people drive your car, it’s important to understand how your insurance sees those other drivers. Two categories matter to most Marylanders: resident drivers and permissive drivers.
Maryland law requires you to have auto insurance to register your car in the state. That insurance needs to provide a certain amount of coverage known as “
mandatory minimums.” Most people select higher coverage to make sure they will be fully covered in an accident. In some cases, even if you purchase higher coverage for yourself, some drivers may only be covered for the mandatory minimums.
Resident Drivers
Let’s start with resident drivers. A resident driver is generally someone who lives in your home and is licensed to drive. In most cases, you are required by your insurance company to list those drivers on your auto policy, even if they do not regularly drive your car. Your insurance company wants to know this information because there is a good chance that at some point a resident driver will get behind the wheel of your vehicle. The household member’s age, driving history, and other factors affect the risk that the insurance company is taking on, and the insurance company wants that risk to be reflected in the premium you pay.
Failing to list a resident driver can create problems if that household member has an accident while driving your car. Depending on your policy, your insurance company may be able to limit or deny coverage, and in some circumstances may reduce liability coverage to Maryland state mandatory minimum limits. If a household driver has separate insurance, tell your insurance company about the household driver and provide evidence that they have separate insurance.
Permissive Drivers
The second category is permissive drivers. So, who is a permissive driver? A permissive driver is someone who doesn’t live in your household but has your permission to drive your car. This could be a friend, neighbor, or someone else you occasionally allow to use your vehicle.
In many cases, your auto insurance follows the vehicle when you give a non-household member with a valid driver’s license permission to drive it. If this is the case, they would generally have the same coverage available to them under your policy as you do when you are driving your own car.
However, it’s important to know that this is not always the case. Auto insurance policies issued and delivered in Maryland may include language that limits coverage for a permissive driver. In some cases, the liability coverage available to a permissive driver may be reduced to Maryland’s mandatory minimum limits, known as a “step-down” or “permissive user provision.”
This means that if someone you give permission to drive your car causes an accident and your policy limits their liability coverage, you could be responsible for damages that exceed the available insurance coverage, potentially putting your own assets at risk.
The best way to know how your policy treats permissive drivers is to read your policy, or reach out to your insurance company, agent, or broker. Ask them whether your policy contains a step-down or permissive-user provision and what coverage would apply if someone else drives your vehicle.
