After reading the personal auto policy provisions, the first thought was that the daughter is not a family member as defined since she does not reside with the named insured. And then, after reading the definition of covered auto, the thinking was that the definition does not apply to the rental vehicle. But, after re-reading the definition, it does say a covered auto is any auto not owned by the named insured while used as a temporary substitute for any other vehicle described in the definition. The definition does not say the named insured has to rent the substitute; it only says a covered auto means a nonowned vehicle used as a temporary substitute for a vehicle shown in the declarations. In this case, the damaged vehicle was shown in the declarations and the rental car was a substitute used while the scheduled vehicle was out of service. So, in our opinion, the rental car is a covered auto.

The who is an insured clause on the PAP states that the named insured is covered for the use of any auto, so if he is found liable in some way for an accident caused by his daughter, the policy will provide liability coverage for him. As for the daughter, paragraph 2 says any person using the named insured's covered auto is an insured. The rental vehicle is a covered auto and the daughter is any person, so she is insured for liability purposes also.

As for the physical damage issue, the rental is a nonowned auto since it is an auto not owned by the named insured and it is being used as a temporary substitute for the covered auto while it is out of service; again, there is no requirement that the named insured rent the substitute car. So, there is physical damage coverage for the nonowned auto rented by the daughter.