If I use my personal vehicle to meet with customers do I need commercial insurance?

[Gustavo Fring]

Interesting thread....

Insurance contracts are a unilateral contract meaning that one party makes enforceable promises. This does not mean that failure to disclose information during a policy period is considered fraud. That is not how a warranty's or statement of facts work. Also, every insurance contract is not the same. This is pretty obvious. Thanks for commenting!

 

[ehall2]

I insured a guy's personal auto with one of the farmer's companies and he had an accident. His auto was totaled but the company denied the claim. Why? Because the insured stated that he took his neighbor's child to school each day and the neighbor paid him $20.00 per week. Farmers denied the claim because this was commercial use.

 

[Markthebroker]

I insured a guy's personal auto with one of the farmer's companies and he had an accident. His auto was totaled but the company denied the claim. Why? Because the insured stated that he took his neighbor's child to school each day and the neighbor paid him $20.00 per week. Farmers denied the claim because this was commercial use.

I know a vehicle claim CAN get denied if it is a personal lines policy, and it's used for commercial, but I've never actually heard of one being denied for that reason. Now I have.

 

[adjusterjack]

I insured a guy's personal auto with one of the farmer's companies and he had an accident. His auto was totaled but the company denied the claim. Why? Because the insured stated that he took his neighbor's child to school each day and the neighbor paid him $20.00 per week. Farmers denied the claim because this was commercial use.

That was rather extreme. It illustrates why insureds (and agents) should familiarize themselves with every word of the insurance policy.

Here's the exclusion (should be pretty standard):

FOR DAMAGES ARISING OUT OF THE OWNERSHIP, MAINTENANCE, OR USE OF A VEHICLE WHILE IT IS BEING USED TO CARRY PERSONS FOR A CHARGE.

This exclusion does not apply to: a. the use of a private passenger car on a share-the-expense basis;

Note the exception to the exclusion.

Should have been easy enough to explain the $20 as a contribution to gasoline expense and not payment for a service.

How did that get missed?

 

[Cornelius]

How is something like this a debate on a insurance board? The P/C side should just supply a answer.

 

[ehall2]

This was extreme but people need to understand that an insurance policy is a legal contract and a lot of companies will go strictly by the legal wording.

 

[Todd King]

I insured a guy's personal auto with one of the farmer's companies and he had an accident. His auto was totaled but the company denied the claim. Why? Because the insured stated that he took his neighbor's child to school each day and the neighbor paid him $20.00 per week. Farmers denied the claim because this was commercial use.

At least we all know now, not to use Farmer's!

 

[ehall2]

There are a lot of big name insurance companies I wouldn't use. Most of them advertise on TV. There is an article in today's issue of Insurance Journal where State Farm was hit with bad faith claim for $6.5 million verdict over unpaid injury claim. "State Farm had every opportunity to do the right thing, but it made a deliberate decision to put profits over protecting its own insured