There are over 240 million registered motor vehicles in the U.S.,
according to the Census Bureau. At a given time, as many as a third of those
clutter American roadways, and it is estimated that one-fourth of those are
being used in the course of work.
Running errands, making deliveries, visiting customers. Even
for those whose employment is not based on driving, it’s fair to say that your
vehicle is an essential part of your employment. This presents an important
question: If you are involved in an accident in the course of employment, are
you covered by your personal auto insurance policy (PAP)?
Like most insurance questions, the answer depends on
circumstance. For example, what kind of car are you driving? Does the car
belong to you or someone else? What type of business are you in?
Consider the language found in the typical PAP. At a glance,
many policyholders are shocked to see that the PAP appears to exclude coverage
for the use of any vehicle in the
course of business other than farming or ranching. However, a very broad exception
to this exclusion allows coverage for the business use of a vehicle provided it
is one of three types: 1) a private passenger auto, 2) a pickup or van, or 3) trailer
while used with the aforementioned. This exception suggests that as long as the
vehicle is one of these three types, coverage remains intact after the accident.
But policyholders should proceed with caution, since some
PAPs are not as generous. For example, some versions may be more restrictive
towards pickups or vans, possibly including a gross vehicle weight (GVW)
limitation or a clause that restricts coverage to owned pickups or vans only. Be
sure to consult your policy before driving any pickup or van for work.
Further, policyholders should understand that any coverage permitted
for business use of personal vehicles by the PAP is not intended for these
three vehicle categories:
Commercial-type vehicles.
The PAP restricts business use to private passenger autos, pickups and vans.
While they can be purchased personally, box trucks, tractor trailers, shuttle
busses and other commercial-type vehicles do not fit this description; such
vehicles require a commercial auto policy.
Furnished or available for regular
use. Often called the “company car” exclusion, this provision is
dangerous and must be remedied if the exposure exists. The reason is that a
typical PAP will exclude coverage for a vehicle that is regularly available to
the policyholder but is not specifically insured under the PAP. For example, if
you are furnished a company car as a benefit to your employment, make certain
that you are covered by your employer’s auto insurance policy. If not, specific
action is required to extend coverage under your PAP; it will not do so
automatically. The good news is that this coverage change is usually
inexpensive and can be done easily; just be sure to request the change now, before
the accident happens. While the definition of furnished or available for
regular use varies by case, err on the side of caution. Don’t assume that because
you don’t take it home with you each night or that you only drive it
occasionally you’re in the clear. Regardless, a vehicle owned by your employer could
be considered available for your regular use. This exclusion presents a
potential gap that is too risky to ignore; your Trusted Choice® agent can
help you take the appropriate steps to close it.
Vehicles that are the business.
A PAP will not cover your vehicle if you use it to carry people for a fee,
such as a taxi, limo or shuttle. The only exception is a share-the-expense car
pool. And if you’re planning to make a few extra bucks delivering pizzas, auto
parts, newspapers or other goods, proceed with caution. Many PAPs also remove
coverage for vehicles that are used to deliver food or other types of property
for a fee.
While in most cases the PAP will cover you for business use
of a personal vehicle, there are situations where it will not. Such situations
are not uncommon and, if not remedied, could result in significant financial
detriment for you and your family. Consult your insurance agent for advice on
how to close potentially devastating gaps in your PAP today.
TLIG is a local Trusted Choice®
agency that represents multiple insurance companies, so it offers you a variety
of personal and business coverage choices and can customize an insurance plan
to meet your specialized needs.
Visit us online at www.tligins.com
or call us at (434) 582-1444.