A Breif Look at "Permissive User" in South Carolina

South Carolina insurance law includes the following persons as “insured” under an automobile policy: (1) the policyholder; (2) the policyholder’s spouse; (3) relatives who reside with the policyholder (by blood or marriage); (4) permissive users; (5) guests in the vehicle; and (6) personal representatives.  See SC Code Ann.  § 38-77-30(7).  Whereas most of these classes of insureds seem self-explanatory, one group that needed further refinement in definition was those persons called “permissive drivers.”   A “permissive user” is someone who used the insured vehicle with the policyholder’s consent, whether express or implied.  What happens if you give a friend permission to borrow your vehicle for ABC and they go off and do XYZ when the accident occurs?  Is the friend a permissive driver in this situation, and should the insurer still have a duty to cover the loss?   Three approaches have been taken when interpreting whether a driver constitutes a permissive driver- and thereby an “insured”- or not. 

The “Hell or Highwater Rule” states that once the initial permission was given by the policyholder, no matter how grossly the terms of the permission are violated, the driver is a permissive driver under the Omnibus Clause.  Under this rule, if Policyholder gives Friend permission to borrow his car to drive to his mom’s for the night and return it in the morning, but Friend goes to a party downtown instead and gets in an accident, Friend would still be covered as an insured under the policy.  The “Minor Deviation Rule” states exactly as its title implies: slight deviations do not bar coverage; material deviations do.  Under this rule, coverage would not apply to the hypothetical above.  However, if Policyholder gave Friend permission to borrow his car for the night to go to his mom’s and return it in the morning, and Friend stops at the gas station on his way to his mom’s and is hit in the parking the lot, it is very likely that this would be considered only a minor deviation, and coverage would apply.  Finally, the “Conversion Rule” states that the vehicle must be used within the scope of permission that was granted by the policyholder.  This is generally the most restrictive rule when it comes to applying coverage.  South Carolina follows the conversion rule and requires a permissive driver to stay within the permission given if coverage is to apply. 

Should any of the above apply to a current situation you are invovled in it is in your best interest to contact an attorney immediately. If you would like to learn more about insurance coverage, please contact Stratos Law, LLC to schedule your free consultation.

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