Topics Covered:
Company cars
Excess over employer's insurance
Garage employees
Rental cars
Naming individual insured is necessary
Rates vary
Physical damage exposure

Company Cars

One of the most common situations in which extended nonowned coverage is advisable is the case of a company car. Sometimes an employer may furnish the insured with a car for the insured's use, both business and personal. Other times, the employer may make one available, as where no single car is assigned to the employee, but some car from a vehicle pool is regularly available. Although the employer's auto insurance usually covers the insured (employee) while on company business, it may also stipulate that the employee is not covered while on personal business. Extended nonowned coverage deletes from the PAP the exclusion of “furnished or available” autos and guarantees that the insured will have his or her usual scope of auto insurance while driving the company car, on or off the job.

Note that the furnished or available exclusion is not limited to company cars. A client may just be taking care of a neighbor's car while the neighbor has gone on a long trip. If, even with the best of intentions, the client gets into the habit of using the car for running errands, there is a possibility that the client's insurer may view the car as one furnished for the insured's regular use and deny coverage for any resulting liability.