Permissive use of an Auto

Louisiana Revised Statute 32:900 provides that motor vehicle liability policies:

B.(2) Shall insure the person named therein and any other person, as insured, using any such motor vehicle or motor vehicles with the express or implied permission of such named insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle or motor vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs with respect to each such motor vehicle as follows: ….

Liability insurance policy language requiring “permission” by the owner to use a vehicle imposes a different standard than a policy requiring only a “reasonable belief” by the operator that he or she had permission of the owner to use the vehicle.

When the insurance policy requires permission by the named insured, coverage exists only when the operator has the express or implied permission of the named insured. The operator’s subjective reasonable belief will not suffice. This language is often applicable to users of covered vehicles under the policy.

When the insurance policy requires a “reasonable belief” by the operator that he or she is entitled to do so, whether the owner actually granted express or implied permission is no longer an element. This language is often applicable to insureds under the policy using a non-owned vehicle.

As long as initial use of an automobile is with the express or implied consent of the insured, the scope of permission granted the user will not preclude coverage unless the deviation from the permission consented to by the insured amounts to theft or other conduct displaying an utter disregard for the return or safe keeping of the vehicle. See Norton v. Lewis, 623 So.2d 874 (La.1993).

For second or subsequent permittee, the questions becomes: Is it reasonably foreseeable that the first permittee might allow others to operate the automobile? Implied permission by the named insured can be found even in the face of a specific prohibition against allowing others to operate the automobile if there is evidence that the named insured was aware of subsequent breaches by the permittee and took no remedial action or made no protests (was their discretion?). On the other hand, the named insured’s express prohibition and consistent conduct enforcing the prohibition will preclude the implication that permission extends beyond the first permittee.