Long Term Rental a Non-Owned Auto under PAP?

I am hoping you could help me interpret the policy language regarding non-owned autos on the personal lines auto policy under Damage to Your Auto. If an insured rents a vehicle for 3 months, would that be considered available for his regular use?

Indiana Subscriber

Although “non-owned auto” under Damage to Your Auto, Section C of the PAP often includes rental cars, the rental vehicle still must otherwise meet the definition of a non-owned auto and not be furnished or available for the regular use of the named insured.

In determining whether a vehicle has been “furnished for regular use”, courts consider the general availability of the vehicle and the frequency of use by the insured. Very recently, the Supreme Court, Appellate Division of New York, found that a rental vehicle did not meet the definition of a non-owned vehicle when it was available for regular use for 55 days. See Elrac, Inc. v. GE Capital Ins. Co., 57 A.D.3d 833 (N.Y.A.D. 2 Dept., 2008).

So although there is no single objective guideline for determining when a rental car becomes furnished for regular use, most court decisions are pretty consistent with Elrac. Thus, whereas a week's or perhaps even a month's rental of a car would probably qualify as a non-owned auto not readily available for the regular use of the insured, a three month rental—wherein the insured would probably be using the car every day on a regular basis—probably would not.

 

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