Q: Is there any reason an individual would need the Drive Other Car endorsement if they also have a personal auto policy? Does this approach create Other Insurance clause issues? Would the Drive Other Car endorsement be considered excess coverage in the event that PAP limits are exhausted?
Response 1: The need for the Drive Other Car endorsement is greatest when there is no PAP in the household. If you have a PAP in addition to the Drive Other Car endorsement, you get double coverage. If my employer offered it to me, I'd jump on it.
Note that the Drive Other Car endorsement won't provide coverage for autos owned by the named insured and their family members. If the underwriter knows there is a PAP in the house, I'd be surprised that they’d offer the Drive Other Car endorsement.
Response 2: The PAP with a personal umbrella policy is much better than the Drive Other Car endorsement.
Response 3: Both the Drive Other Car endorsement and the PAP provide coverage on an excess basis. As outlined in the Other Insurance section of the BAP and PAP, the two policies would share coverage on a proportionate basis:
BAP Other Insurance
When this Coverage Form and any other Coverage Form or policy covers on the same basis, either excess or primary, we will pay only our share. Our share is the proportion that the Limit of Insurance of our Coverage Form bears to the total of the limits of all the Coverage Forms and policies covering on the same basis.
PAP Other Insurance (Liability)
If the coverage under this policy is provided on an excess basis, we will pay only our share of the loss that must be paid under insurance providing coverage on an excess basis. Our share is the proportion that our limit of liability bears to the total of all applicable limits of liability for coverage provided on an excess basis.
Response 4: The ISO Drive Other Car endorsement only covers the designated person's non-owned auto exposure. The endorsement eliminates any coverage for an owned auto.
Response 5: I don't see a problem with having an extra set of limits for a claim. When I had a company car, I also had the ISO Extended Non-Owned Coverage for Named Individual endorsement on my ISO PAP, and it extended to my non-ISO PUP. At the time, I had over a million bucks in extra insurance for the cost of a couple pizzas.
Response 6: It is not necessary to have the Drive Other Car endorsement along with a PAP. Learn more about the language restrictions within the Drive Other Car endorsement by searching the Big “I” Virtual University for “DOC language.”
Most states have anti-stacking provisions or sharing provisions within insuring agreements. If the concern here is limits, excess liability coverage would be a better solution for the named insured, both personally and commercially. Depending on the carrier of record, you may be able to obtain a true umbrella for the commercial aspect. This would be the most effective coverage approach.
Regardless of the limits selected, you must have the named insured sign either corporately or individually concerning the level selected.
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