Leased Auto Covered as Owned Auto?

Our insured has symbol 2, owned autos only, to describe the covered autos on his business auto policy. The question has come up recently whether coverage could be denied for a leased auto that the insured uses. This is a long term lease and the insured considers the auto as his own, but would symbol 2 preclude coverage for the car if an accident happened?

Indiana Subscriber

Coverage could very well be denied. The personal auto policy specifically notes that an auto leased for a continuous period of at least six months is considered as an owned vehicle. However, the business auto policy (BAP) has no such provision. In addition, the BAP specifically lists leased autos as covered autos through the use of symbol 8, hired autos only. The intent here seems to be to not consider leased autos as owned autos.

It may be that some insurers would accept long term leased autos as owned based on company underwriting philosophy, but it is just as reasonable to think that other insurers would not accept a leased auto as an owned one because of the language on the BAP. To prevent any unpleasant surprises to the insured in the event of an accident, it would be best to check with the insurer ahead of time to see how it views a leased auto.

 

 

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