Drive Other Car BAP Endorsement: Coverage for Named Insured vs. Listed Individual

• By: The Big "I" Virtual University
• August 14, 2026

An insured is listed as a covered individual on the drive other car endorsement of a business auto policy. He rented a vehicle personally and was involved in an accident. The agency submitted a claim notice to the carrier for physical damage to the rental vehicle and medical payments coverage.

The adjuster denied the claim based on their interpretation of the form, stating that a “rented vehicle is a ‘hired-auto’ and is not covered.”

Q: Isn’t the drive other car endorsement designed to provide coverage for the scheduled individuals, including for physical damage?

Response 1: There is no coverage for damage to the rented vehicle, but not for the reason stated by the adjuster.

The endorsement states: “This endorsement changes only those coverages where a premium is shown in the Schedule.” If no premiums are shown in the schedule of the endorsement in that section, there is no coverage.

However, the Additional Coverage schedule lists drive other car coverage and includes a list of individuals that the coverage applies to, as well as the coverages that are provided under the drive other car coverage and the premiums charged for the provided coverages. The coverages that are provided for the specific individuals mentioned in the policy are limited to liability and medical payments. There are no entries for collision coverage, and no premium is shown for collision coverage, for either of the listed individuals.

Given that, there is no collision coverage afforded for the damaged rental auto, or any other auto, under the drive other car coverage that is included in the policy.

As for the reason stated by the adjuster, I’m assuming the damaged rental auto was rented by one of the individuals listed on the endorsement, rather than a named insured—given that the named insured is described on the declarations page as a Limited Liability Company (LLC).

If collision coverage and a premium for collision coverage were shown for the individual who rented the damaged rental auto, there would have been collision coverage for the damaged rental auto. The endorsement states:

D. Changes In Physical Damage Coverage

Any private passenger type “auto” you don’t own, hire or borrow is a covered “auto” while in the care, custody or control of any individual named in the Schedule or his or her spouse while a resident of the same household except:

1. 1. Any “auto” owned by that individual or by any member of his or her household.
   2. Any “auto” used by that individual or his or her spouse while working in a business of selling, servicing, repairing or parking “autos”.

The preamble of the BAP states: “Throughout this Policy, the words “you” and “your” refer to the Named Insured shown in the Declarations.”  

Subject to my assumption that the individual is not the named insured, the individual who rented the damaged rental auto was not a “you” under the terms and conditions of the policy. Therefore, the rented auto was not hired by a “you” and the exception to coverage in the first sentence of provision D. Changes In Physical Damage Coverage of the endorsement, which the adjuster was presumably relying on in denying coverage, would not have applied to eliminate coverage.

To sum it up, there is no collision coverage for the damaged rented auto, but not for the reason given by the adjuster, who was incorrect in their interpretation of coverage. The insured needs to be informed and the adjuster should be informed of the correct interpretation of coverage—and the importance of the meaning of “you” in this and nearly all other commercial policies.

Response 2: Coverage applies to any auto that “you”—the named insured—do not own, hire or borrow, provided the auto is being used by the individual named in the drive other car endorsement schedule. If the individual listed in the endorsement rents an auto, that auto is covered.

The misunderstanding appears to be the assumption that any rented vehicle is automatically a “hired auto.” Under the policy, however, a hired auto is defined as: “Only those autos you lease, hire, rent or borrow.”

Accordingly, a vehicle is a hired auto only if it is leased, hired, rented or borrowed by the named insured. As long as the named insured did not lease, hire, rent or borrow the vehicle, it does not meet the policy’s definition of a hired auto.

This question was originally submitted by an agent through the Big “I” Virtual University’s (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

This article is intended for general informational purposes only, and any opinions expressed are solely those of the author(s). The article is provided “as is” with no warranties or representations of any kind, and any liability is disclaimed that is in any way connected to reliance on or use of the information contained therein. The article is not intended to constitute and should not be considered legal or other professional advice, nor shall it serve as a substitute for obtaining such advice. If specific expert advice is required or desired, the services of an appropriate, competent professional, such as an attorney or accountant, should be sought.