Your 20-year-old daughter is away at college. She does not have a car on campus, but her roommate does and she drives the auto occasionally. Would your unendorsed personal auto policy respond if she has an accident driving the car? If not, is there anything you can do about it? You might be surprised…
There is an important exclusion in the Personal Auto Policy (PAP) that says:
B. We do not provide Liability Coverage for the ownership, maintenance or use of:
3. Any vehicle, other than “your covered auto,” which is:
a. Owned by any (family member); or
b. Furnished or available for the regular use of any “family member.”
As you can see, if the vehicle is “furnished or available” for the “regular use” of a “family member,” there is no coverage under the parents’ policy while the student drives the car. Without debating the issues of “furnished or available” or “regular use,” let’s assume that the student does have regular, unrestricted access to her roommate’s car. In that case, she is at the mercy of the insurance on the vehicle, if any, since her parents’ policy will not provide any coverage. Is there anything her parents can do to extend coverage to her under their policy while driving her roommate’s car? Well, speaking of the word “extend”…
There is an ISO endorsement, the PP 03 06 – Extended Non-Owned Coverage for Named Individual that may provide coverage. This endorsement buys back several exclusions, including B.3. above. However, note the following wording from the endorsement:
III. This endorsement does not afford coverage under Part A or Part B of the policy for any accident involving a vehicle owned by the individual named in the Schedule or in the Declarations, by a member of the same household, or any accident involving a temporary substitute vehicle for such owned vehicle.
So, even though this endorsement provides coverage to family members for vehicles furnished or available for their regular use, it does not provide coverage if the vehicle is owned “by a member of the same household.” Is their living situation considered a household? What if it’s not her roommate who makes the auto regularly available, but her best friend across the hallway?
Clearly there are no easy answers. So, the best thing to do is to discuss the situation with your agent in advance.
Parts of this article were taken from the Independent Insurance Agents and Brokers of America, Virtual University.Information provided by Joan St.Clair, MacDonald Insurance Agency, 1117 Main St., Scranton, 712-652-3344.