Drive Other Car Coverage

Vehicles owned or supplied by a business to an employee or non-owned and rented cars represent a problem when they are insured under a basic business auto policy. Such policies either provide little or no coverage when a loss involves personal use or use by a person who is NOT the vehicle’s owner. Serious coverage gaps may exist.

A basic business auto policy does not provide liability coverage for operating a hired or non-owned car. The individual is only covered while driving a company owned vehicle.

No coverage exists for the individual’s spouse or other family members for medical payments, uninsured motorist or underinsured motorist.

No coverage is provided for physical damage losses to any hired or non-owned auto.

There is an option that could close these gaps. A business auto policy could be amended with Drive Other Car Coverage. This option can be used to expand the policy to list and protect other persons and situations. Typically, the following coverages are provided by the option:

• Liability
• Auto Medical Payments
• Uninsured Motorists
• Underinsured Motorists
• Physical Damage

The additional protection can extend liability coverage to non-owned or hired vehicles as long as the amended policy lists all members in the driving household. There are two exceptions. First, no member of the household can own the vehicle. Second, the vehicle cannot be involved with running a business as a car dealer, repair operation or parking lot.

A Drive Other Car Coverage form extends Auto Medical Payments and Uninsured and Underinsured Motorists Coverage to protect non-owned and hired vehicles when driven by any insured household member.

Another issue handled by a Drive Other Car Coverage option is Physical Damage Coverage for non-owned or hired autos. The coverage expands the definition of a covered auto to include a private passenger type vehicle under the control of the scheduled individual and the spouse.

If your household’s vehicle situation is similar to what has been discussed, you might want to schedule some time with an insurance professional to arrange for proper coverage.