Rented and borrowed vehicles and car insurance exclusions


Unrated Vehicles Exclusion

The definition of your covered vehicle encompasses not only the rated and described vehicles in the declarations, but also rented and borrowed vehicles. Your covered vehicle does not include owned vehicles that are not rated (described), newly acquired vehicles, or nonowned vehicles that are furnished to or regularly available for the use of an insured. This exclusion precludes medical payments coverage arising out of the latter categories of vehicles.

Family Member Owned Vehicles Exclusion

This exclusion is, in effect, an exception to the previous exclusion with respect to bodily injury sustained by an insured while occupying or struck by a vehicle other than your covered vehicle that is owned by, furnished to, or regularly available to a family member. This provision is commonly included in policies of insurers that do not use the ISO policy form.

This exclusion does not apply to the named insured or his or her spouse. This means that, if a family member owns or uses a vehicle that is not covered under the policy and the named insured or his or her spouse is injured while occupying or struck by such a vehicle, medical payments coverage will exist.

Nonpermissive Use Exclusion

This exclusion precludes medical payments coverage for bodily injury to an insured sustained while occupying a vehicle without a reasonable belief that the insured is entitled to do so. The goal of this exclusion is to defeat medical expense claims in circumstances where no reasonable person should expect insurance to apply. This exclusion's applicability will be highly dependent on the facts of a given claim.

Business Exclusion

Given the dual purposes of the average insured's use of vehicles, this exclusion is actually fairly limited in its scope. Recall, business is broadly defined as any trade, profession, or occupation. The medical payments business exclusion precludes coverage for bodily injury to an insured while occupying a vehicle when it is used in the business of an insured. The exclusion, however, contains an exception for injuries sustained while the insured is occupying: a private passenger auto, an owned pickup or van, or, a tractor attached to either category of vehicles.

If the injury arises out of occupying a private passenger auto, in an insured's business, the exclusion does not apply. Nor does the exclusion apply to injuries sustained while occupying owned pickups or vans used in an insured's business.

Well, what's left? - occupying a vehicle not owned by an insured, and used in the insured's business? This exclusion applies to injuries sustained while an insured is occupying nonowned vehicles other than private passenger autos (pickups, vans, or other vehicles), while such vehicles are being used in the insured's business. This means rented, borrowed, or employer-owned, nonprivate-passenger vehicles used in an insured's business.

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This article was sent to us by: Caledon Pierce at 10072010

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