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It’s homecoming season for Louisiana high schools, and teenagers need transportation to the football game and the homecoming dance. Some parents lend their vehicle to their teenager to drive a group of friends around for the homecoming events. Caught up in the excitement of the weekend, who is thinking about omnibus coverage?
An omnibus insurance clause is a statutorily mandated clause that an automobile liability insurer must include in its insurance contract. Sensebe v. Canal Indem. Co., 2010-0703 (La. 1/28/11), 58 So. 3d 441, 447. The clause states that the named person on the policy is insured, as well as any other person using the vehicle with the express or implied permission of the named insured. La. Rev. Stat. § 32:900(B)(2). The concern of omnibus insurance coverage is less for the named insured than it is for the person who is actually injured by the driver of the vehicle and trying to get compensation for those injuries.
The second permittee issue often arises in the situation of a parent who lends a vehicle to teenage child who in turn lends the vehicle to a friend who causes a wreck. The child clearly had the permission of the parent to use the vehicle. The question becomes: did the friend (second permittee) have the permission of the parent (named insured) to use the vehicle at the time of the wreck?
The answer turns on the scope of the permission given to the child (first permittee). In most cases, the parent was unaware that the child allowed a third party friend to drive the vehicle, so the court looks at whether the friend had the implied permission of the parent. “Generally, implied permission ‘arises from a course of conduct by the named insured involving acquiescence in, or lack of objection to, the use of the vehicle.’” Manzella v. Doe, 94-2854 (La. 12/8/95), 664 So. 2d 398, 402. Implied permission is determined by whether it was reasonably foreseeable that the first permittee would allow someone else to drive the vehicle.
Courts liberally interpret implied permission because of the public policy of protecting not just the driver of the vehicle, but also anyone injured by the driver. So when the named insured gives permission to another to use the vehicle as his own, the possibility that the first permittee might allow another to drive the car is “clearly foreseeable.” Perkins v. McDow, 615 So. 2d 312, 315–16 (La. 1993).
Once permission, whether express or implied, to use a motor vehicle is established it is given a wide and liberal meaning in determining coverage. So long as the initial use of the vehicle is with the consent, express or implied, of the insured, any subsequent changes in the character or scope of the use do not require additional specific consent of the insured; coverage will be precluded only where the deviation from the use consented to amounts to theft or other conduct displaying utter disregard for the return or safekeeping of the vehicle.
Norton v. Lewis, 623 So. 2d 874, 875 (La. 1993).
Some parents place restrictions on their child’s use of the vehicle. When a parent specifically instructs the child not to let others drive the vehicle, implied permission is generally non-existent, and thus there is no liability coverage for the friend. An exception would apply if, for example, there was an emergency situation, or if the child violated the restriction with the parent’s knowledge but without the parent’s objection, or if the use of the vehicle benefitted the parent. Perkins, 615 So. 2d at 316.
If trying to prove coverage, the key question in finding implied permission is whether the first permittee could exercise discretion in his use of the vehicle. See, e.g., Coco v. State Farm Mut. Auto. Ins. Co., 136 So. 2d 288, 293 (La. App. 3d Cir. 1961); King v. Louisiana Farm Bureau Ins. Co., 549 So. 2d 367, 369 (La. App. 2d Cir. 1989).