An agent's client insures a tractor commercially for liability and physical damage. Will their HO policy respond if a loss occurs while someone else is driving it?
An agent’s client insures a tractor commercially for liability and physical damage. The insured uses the tractor on his property and trailers it to his business on occasion—which the agent has covered. However, the insured may also trailer the tractor to his father- and brother-in-law’s location for them to use it on occasion.
Q: "Will the homeowners policy respond for non-owned tractor if something happens while the father- or brother-in-law is operating it? If anything happens because something is wrong with the tractor, my client would have coverage, but what about the other parties using the equipment that they don’t own or insure directly?"
A: “Coverage for a situation where someone uses a non-owned tractor to service their premises depends on the specific HO policy. Each one is different, especially when it comes to motor vehicles, which may or may not be covered even by an ISO HO policy.
Coverage differs under each of the most recent editions of the ISO HO-3. For example, here is the applicable excerpt from each of the ISO editions, outlined in the Big ‘I’ Virtual University (VU) webinar Finding and Fixing Personal Lines Coverage Gaps:
- 1991 HO-3 Motor vehicles ‘Used to service an insured's residence’
- 2000 HO-3 Motor vehicles ‘Used solely to service an insured's residence’
- 2011 HO-3 Motor vehicles ‘Used solely to service a residence’
In 1991, there should be coverage for this exposure. In 2000, there is no coverage for this exposure. In 2011, there is no coverage because the vehicle is used at a nonresidential location.
If the HO policy in question is not ISO, you’ll need to read the motor vehicle exclusion to see how it applies. For more information, search the VU for ‘tractor’ and ‘lawn mower.’”
Bill Wilson is director of the Big “I” Virtual University
This question was originally submitted by an agent through the VU’s Ask an Expert Service. Answers to other coverage questions are available on the VU website. If you need help accessing the website, email logon@iiaba.net to request login information.
