The next exclusion common to personal auto policies is for liability arising out of various categories of auto-related businesses other than transportation of property or persons. This exclusion precludes coverage for any insured while employed or otherwise engaged in the business of selling, repairing, servicing, storing, or parking vehicles designed for use mainly on public highways. This exclusion includes an exception for the named insured's family member, partner, agent, or employee.
The intent of this exclusion again is to preclude coverage under a personal auto policy for use of cars or trucks of others by persons employed in these types of auto-related businesses. The intent is that coverage for accidents arising out of such use of vehicles should be the subject of an auto dealer's or garagekeeper's liability policies.
The exception to the exclusion recognizes the need for coverage for the insured's or family member's use of personally owned vehicles. This includes connection with business use as well as the need for coverage if a personal vehicle is lent to a partner or employee of an auto-related business. This exception exists due to the vehicle owner's statutory liability under state financial responsibility laws.
This is a belt-and-suspenders exclusion intended to fill gaps in the previous two exclusions. This exclusion precludes coverage for maintenance or use of any vehicle while the insured is employed or otherwise engaged in any business that is not one of the auto-related businesses described in the previous exclusion. However, this exclusion precludes coverage for your maintenance or use of an employer-provided vehicle while used for business or employment activities. For example, if you company-provided car is in the shop, your employer's commercial auto coverage should apply to a rental.
Far too many persons are far too casual about the extent to which they allow others' use of their vehicles without an appreciation for the liability exposures they are assuming by doing so. This exclusion is not going to put a vehicle owner on the hook for a carjacker's injuries inflicted on others after he or she steals your car or truck. It could, however, limit your coverage if a child or other person uses your car or truck in a manner beyond your expected reasonable permission to them for use of that vehicle.
For example, your son or daughter may have your permission to use your car or truck, but that grant of permissible use does not extend to situations in which they turn over the keys to one of their acquaintances. In such a circumstance, you may only be covered for your state's minimum statutory owner's liability if an accident results.
Because there is serious potential to be uninsured or underinsured due to ambiguities in your granting permission to others to use your vehicle, it is extremely important that the scope and limits of others' permissible use of covered vehicles be made clear before you authorize such use.
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Note: This article was sent to us by: Walt Bielfield at 10072010
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