Which statement about Private Car policy restrictions is true?

Which statement about Private Car policy restrictions is true?

• A. It allows hiring out to others
• B. It covers compensation for passengers
• C. It is primarily for commercial cargo transport
• D. It must not be hired out to others or used for compensation

Answer: (D)

Private Car policies are designed for personal, non-commercial use. They exclude situations that involve earning money from the vehicle or using it for hire or reward. If the car is hired out to others or used for compensation, that changes the risk profile to a commercial one, and coverage under a Private Car policy typically wouldn’t apply. Insurers require a different, commercial auto policy for those uses, so the restriction that the car must not be hired out to others or used for compensation is the accurate statement.

Private Car policies are designed for personal, non-commercial use. They exclude situations that involve earning money from the vehicle or using it for hire or reward. If the car is hired out to others or used for compensation, that changes the risk profile to a commercial one, and coverage under a Private Car policy typically wouldn’t apply. Insurers require a different, commercial auto policy for those uses, so the restriction that the car must not be hired out to others or used for compensation is the accurate statement.