Automobile liability insurance policies usually contain a provision, commonly called the "omnibus clause," extending the coverage of the policy to any person using or responsible for the use of the insured vehicle, provided the actual use is with the permission of the named insured.
How Far Does the Omnibus Clause Extend?
Often, the named insured gives permission to a first permittee, who then gives permission to a third party known as the second permittee. The most common example is when a parent allows a child to use their car, and the child then lets a friend drive. The main issue in determining coverage when this occurs is whether the initial permission included either authority to the first permittee to allow the second permittee to so operate or use the vehicle, or the named insured's permission to the second permittee to do so.
Most courts hold that the named insured's permission to another to use the insured automobile does not authorize the first permittee to delegate his right to a third person. However, the named insured's permission to a second permittee need not be express. Rather, permission may be implied from the nature or scope of the initial permission, or from the conduct of the parties and the particular facts and circumstances.
How Do Courts Determine Whether the Insured Has Given Permission?
In cases where the named insured expressly authorized the original permittee to delegate his right to use the insured vehicle to other persons, the courts have generally ruled that coverage will extend to a second permittee. In cases where the named insured expressly prohibited the original permittee from allowing anyone else to drive, and the second permittee was driving for his own benefit, most courts have taken the position that coverage will not extend to the second permittee.
In cases where the insured did not expressly give permission to allow third party individuals to operate the vehicle, courts are split. Some courts have ruled that a named insured's grant of unrestricted use of the automobile to another person includes the authority to permit other persons to use the car, and thus the omnibus clause applies.
However, other courts have held that the insured’s silence does not give the first permitee power to delegate. Thus, a second permittee using the car for his own purposes would be denied coverage because the required permission of the named insured was lacking.
Should I Consult an Attorney?
Automobile insurance policies can be complex and confusing, and dealing with your insurance company can be an extremely difficult task. If you feel that your insurance company is wrong in denying your claim, an attorney can help. An attorney can help explain the complex provisions of your policy and help you deal with your insurance company so that you get the coverage you are entitled to.