Vehicle Use And Permission

Dallas insurance attorneys understand how the “permissive driver” rule works in Texas. Here is a case that helps explain it. It is a 2003, Texas Supreme Court case styled, Sink v. Progressive. Here is some of the relevant information.
This case concerns coverage for a “temporary substitute” vehicle under the standard Texas Personal Auto Policy. The issue is whether the policy provides liability coverage when the insured, whose own vehicle is disabled, takes and drives an automobile owned by someone who is not a family member without permission or the reasonable belief that he has permission and is involved in an auto accident with a third party. The trial court correctly held that there is no liability coverage under these circumstances.
Joshua McCauley’s pickup truck became disabled. He was at that time employed by Alamo Rent-A-Car, and while on the job, he took one of its rental cars to drive to a location that is not disclosed in the record to get his tools so that he could attempt to repair his truck. It is uncontested that McCauley did not obtain permission from Alamo to use any of its vehicles and did not believe that he had permission to use the car in question. While returning to work in Alamo’s car, McCauley was involved in an accident with Paul Sink.
Sink sued McCauley and obtained a favorable judgment that was subsequently discharged in bankruptcy. Sink then commenced this action against Progressive, under its policy insuring McCauley’s truck. Sink claimed that he was a third-party beneficiary of McCauley’s policy and sought benefits under that policy’s liability coverage.
The liability coverage section of the policy provides that Progressive “will pay damages for bodily injury or property damage for which any covered person becomes legally responsible because of an auto accident.” The policy contains a broad exclusion that precludes coverage for any person who uses a vehicle without a reasonable belief that he or she is entitled to do so, but the policy also states that the exclusion does not apply to an insured or an insured’s family member who uses “your covered auto”:
EXCLUSIONS A. We do not provide Liability Coverage for any person:
8. Using a vehicle without a reasonable belief that that person is entitled to do so. This exclusion does not apply to you or any family member while using your covered auto.
The policy’s definition of “your covered auto” contains, among other things, the reference to a “temporary substitute” vehicle:
G. “Your covered auto” means:
4. Any auto or trailer you do not own while used as a temporary substitute for any other vehicle described in this definition [e.g., a vehicle identified in the policy Declarations or a vehicle acquired by the insured during the policy period] which is out of normal use because of its:
a. breakdown;
b. repair;
c. servicing;
d. loss; or e. destruction.

It is common to rent a car, use a loaner car, or borrow a car from a friend or family member while one’s primary vehicle is undergoing service or repair. The generally accepted meaning of “temporary substitute” vehicle does not, however, include taking a vehicle without at least a reasonable belief of entitlement to its use.
This interpretation is not in conflict with paragraph 8 of the exclusions. Indeed, it is in harmony with that exclusion. Paragraph 8 says that a person using a vehicle without a reasonable belief that he or she is entitled to do so is not covered. But this exclusion does not apply to the insured or any family member while using “your covered auto.” Thus, under the current TPAP, “your covered auto” includes a vehicle owned by an insured and “used as a temporary substitute” by a teenage member of the insured’s family. But the general public understands that if a vehicle driven by a teenager and expressly covered by the policy breaks down and the teenager steals a neighbor’s car, the stolen vehicle would not be regarded as a “temporary substitute” vehicle. Nothing in the use of the term “temporary substitute” vehicle suggests otherwise. The analysis would not change if the teenager “borrowed” the neighbor’s car without the neighbor’s knowledge or permission. The same can be said of an adult insured who “borrows” his or her employer’s car without permission. The ordinary connotation of a “temporary substitute” vehicle is that it is a vehicle used with the owner’s permission, or at least a reasonable belief that the owner consented.
Sink did not dispute in the court either that McCauley used his employer’s vehicle without permission or that McCauley did not believe he had his employer’s permission.
The trial court was correct in holding that the car McCauley took from his employer did not constitute a “temporary substitute” vehicle under the policy insuring McCauley’s truck.