Bridge Your Auto Policy Gap with Drive-Other-Car Coverage
Posted September 28, 2016
If you provide company vehicles to your employees and these employees don’t have their own personal automobile policy, a potential gap in coverage may exist. To adequately cover your risk, a drive-other-car endorsement is specifically intended to bridge this gap.
Drive-other-car Coverage Basics
If you have employees that are provided with company-owned vehicles, they often do not have an additional automobile and therefore do not carry a personal automobile policy.
If the employee doesn’t carry a personal policy and drives a vehicle borrowed from another party, other than the company-issued vehicle, drive-other-car coverage affords them protection should an accident occur.
Drive-other-car coverage is endorsed onto your business automobile policy and provides coverage only for scheduled individuals.
How Does This Differ From Hired/Non-owned Coverage?
- There are some key differences between hired/non-owned coverage and drive-other-car coverage:
- Hired automobile coverage is provided for vehicles that are leased, rented, hired or borrowed by the insured or its employees for business purposes.
- Non-owned coverage is afforded to employers when an employee uses their own personal vehicle for business purposes.
Are You Covered?
To show how drive-other-car coverage applies, consider the following situations:
- A salesperson rents a car for personal use on vacation and damages another vehicle. Is he or she covered?
- A business owner has all the vehicles titled in the company’s name. The owner’s family travels out of town on vacation and rents a car, opts not to purchase coverage and is involved in an accident. Is he or she covered?
- An executive borrows a friend’s minivan to move and is involved in an accident. Is he or she covered?
In all of these circumstances, the business automobile policy provides no coverage since the “covered auto,” or company-owned vehicle, was not involved in the accident. A drive-other-car endorsement closes the exposure loop in these instances.
Take these steps to minimize your exposure:
- Require all of your employees who are either issued or that will drive company vehicles to have personal automobile policies.
- Notify Horst Insurance of any employees and family members that do not have personal automobile policies.
- Review the coverage provided on the endorsement so that you have a clear understanding of what is included. Coverage can include liability, medical payments, uninsured motorist and physical damage coverage. Review the endorsement to ensure that all employees and/or family members that do not have personal automobile policies are scheduled on the endorsement.
- Notify us of any individuals not shown on the schedule.
Proper Planning is No Accident
An agent who understands your business can help you understand drive-other-car coverage and endorse your business automobile policy to your individual needs.
Call us today at 717-560-1919 to ensure that your automobile coverage adequately meets your needs.