Many drivers assume that if they borrow or use a vehicle they do not own, their Personal Auto Policy will automatically provide excess liability coverage if an accident occurs. In many situations, that is true.
However, there is an important exception buried within many Personal Auto Policies known as the “Regularly Furnished Auto” Exclusion.
What Is a Regularly Furnished Auto?
A regularly furnished auto is a vehicle that you do not own but have ongoing access to and use on a regular basis.
Common examples include:
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A company vehicle assigned to you for daily use
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A vehicle owned by a family member that you drive regularly
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A vehicle provided by your employer that you take home every night
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A vehicle that a friend or relative allows you to use whenever needed
Although you may not own the vehicle, the insurance company views your access to it as similar to ownership because it is available to you on a regular and recurring basis.
Why Is This Important?
Most Personal Auto Policies provide liability coverage when you occasionally use a non-owned vehicle. In those situations, your Personal Auto Policy generally acts as excess insurance over the vehicle owner’s policy.
However, many Personal Auto Policies contain language that excludes or limits coverage for vehicles that are regularly furnished or available for your regular use.
This means your Personal Auto Policy may not provide the excess liability protection you expected.
A Real-Life Example
Let’s assume John is provided a company car that he drives every day for both business and personal use.
One weekend, John causes a serious accident that exceeds the limits carried on the company’s auto policy.
John assumes his Personal Auto Policy will step in and provide additional liability protection. Unfortunately, because the vehicle was regularly furnished for his use, his Personal Auto Policy may not provide excess coverage.
As a result, John could be left personally responsible for damages that exceed the employer’s policy limits.
Who Should Be Concerned?
You should review your coverage if:
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You have a company car.
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You are an employee who takes a work vehicle home regularly.
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You drive a vehicle owned by a parent, child, or other relative on a frequent basis.
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You have routine access to a vehicle that is not titled in your name.
The Solution
Every insurance company handles these situations differently, and policy language can vary. The safest approach is to discuss any non-owned vehicle that you use regularly with your insurance professional.
A simple coverage review may help identify potential gaps before a claim occurs.
The Bottom Line
Just because you do not own a vehicle does not mean your Personal Auto Policy will automatically protect you while using it.
If a vehicle is furnished or available for your regular use, your Personal Auto Policy may not provide the excess liability coverage you expect. Understanding this exclusion can help prevent an expensive surprise after a serious accident.
Have questions about a company vehicle or another vehicle you use regularly? Contact Brewster Allen Wichert Insurance today for a coverage review and make sure you’re protected before a loss occurs.
