Reader question:
What’s an omnibus clause in regards to car insurance?
Lorelai
Good question.
It seems that car insurance companies just love to come up with all kinds of different niches to fit your coverage into. While this can make your car insurance a lot easier to personalize, and thus more fitting for you, it can still be frustrating because getting to know all the possibilities is just so confusing. However, you would do yourself some good to get to know them, because many special types, like the omnibus clause, can prove helpful to you in the future.
The omnibus clause is, basically, a contract with your car insurance company that extends the coverage on your vehicle beyond the actual names covered, to anyone using the vehicle with your permission. This is extremely helpful for unusual circumstances.
Say it’s the holiday and your driveway is full. Your cousin is going to go pick up some sodas, but her car is blocked in, so you give her the keys to your own. Now, you wouldn’t put her on your policy because she has her own car and would normally not have a reason to use yours, but the store is just a couple of minutes away, so what’s the big deal? Then she backs into the car behind her as she’s returning…Lucky for you, you have the omnibus clause on your insurance policy, so the accident is still covered, even though her name’s not on your policy.
Cheers,
Fashun Guadarrama.