Business Auto Insurance - Drive Other Car Coverage

 

It's not uncommon for a business to provide an employee with a car or truck that is owned by the business.  The insurance is then purchased by the business on a Business Automobile Policy.    It's also not uncommon for a business owner to title the vehicle they normally operate in the business name and insure that vehicle under the business insurance program.  You have to take advantage of those potential tax deductions!  

The important thing to realize is that a coverage gap exists should this business owner or employee not have a Personal Automobile Policy.   

Personal Auto Policy will pay damages for bodily injury and property damage for which the insured becomes legally responsible because of an auto accident .  This language does not limit the vehicle that was being used in the automobile accident - you could be driving a rental or even your neighbors minivan to run out and pick up the kids from soccer practice.   If an accident occurs where you may be liable...  the neighbors car insurance is primary.  But, what happens if your neighbor missed a bill and coverage was accidently canceled?   What happens if it's a serious accident and the neighbors insurance limits are not enough?  Your Personal Auto Policy is broad enough to protect you in this situation as secondary coverage.       

An unendorsed Business Automobile Policy is not broad enough.  It will not provide liability coverage for someone operating a hired or non-owned car when the auto is being operated for personal use. 

DRIVE OTHER CAR COVERAGE

Drive Other Car Coverage is an endorsement that is available to someone who is furnished a company owned vehicle BUT does not have a Personal Automobile Policy.  The  Drive Other Car endorsement typically expands coverage by changing a commercial auto policy's definition of  "Who is an Insured."   The endorsement will list the owner or employee (and possibly family members) who become insured's under the Business Auto Policy when operating autos not owned by the business and while operating a vehicle for non business related use.

When corporate vehicles are provided to owners or employees and this individual does not have a Personal Auto Policy - the Drive Other Car (DOC) coverage endorsement is a must.

Call with questions. 

Dan Zeiler

dan@zeiler.com 

708.293.5500 

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