1. 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 their company owned vehicle
Example: Joe has no personal auto policy since his employer supplies and insures the car he drives. One day Joe accompanies his friend to a bachelor’s party. Later in the evening, his friend drinks too much and asks Joe to drive them both home. On the way, his friend passes out, distracting Joe from noticing a stop sign. Joe crashes into a minivan. The friend had minimum limits on his policy and Joe is left with no insurance coverage for the damages and injury he caused.
2. No coverage exists for the individual’s spouse or other family members for medical payments, uninsured motorist or underinsured motorist.
Example: Cindy and her parents drive her dad’s company-owned car, so they don't have a personal auto policy. Cindy’s pal, Karen, invites her to go shopping at a mall. Halfway there, a pick-up strikes Karen’s car and Cindy was seriously injured. The other driver was uninsured and Karen’s policy carried minimum uninsured motorists (UM) limits. Cindy’s family had to bear the expenses that weren't handled by Karen's UM coverage.
3. No coverage is provided for physical damage losses to any hired or non-owned car.
Example: Ginger hated the boredom and inconvenience of driving her husband’s company car, the only one in the household. Her neighbor, Jake, was selling his sports car, which he couldn’t afford to insure. Ginger liked the car, so she took it for a test drive. However, she took a sharp turn too fast, ran off the road and hit a tree, demolishing Jake’s car. She had to pay for the damages herself since the insurance on her husband's company car did not cover the loss.
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 expand the policy to list and protect other persons and situations. Typically, the following coverages are provided by the option:
- Auto Medical Payments
- Uninsured Motorists
- Underinsured Motorists
- Physical Damage
Please see part two of Drive Other Car Coverage to see how this option works.