Pizza Delivery on a Personal Auto Policy

Probably not. A personal auto policy is priced for personal use. It typically excludes liability coverage for a vehicle used to carry persons or property for a fee, and for public or livery conveyance. Pizza delivery is a business use for a fee, so the PAP's liability coverage is likely excluded for the accident.

Limit check if coverage applied: the cyclist's $40,000 medical bill is within the $100,000 per-person limit, and the $6,000 bike damage is within the $50,000 property-damage limit. So the limits are not the problem-the exclusion is.

Possible alternative source: the pizza shop's commercial auto policy may provide hired-auto or non-owned-auto liability coverage for drivers using their own vehicles on shop business. But the facts say Kevin's pickup is not listed on that policy, and hired/non-owned coverage is not automatic in every form. The shop's policy may also exclude drivers who are not scheduled. That leaves a real gap.

Result: Kevin faces personal exposure, and the shop may face vicarious liability. The PAP should not be counted on to defend or pay.

Kevin's pickup: collision coverage on the PAP generally responds to direct physical damage to a listed vehicle, subject to the $500 deductible, because collision is not a liability coverage. But the form must be checked: some PAPs exclude physical damage for vehicles used in delivery or livery. If the exclusion is broad, the pickup's damage may be uncovered. If collision applies, the insurer pays the lesser of actual cash value or repair cost, minus $500.

Roommate's car: the PAP's non-owned-auto liability coverage may respond to Kevin's liability while driving a car he does not own, if the car is not furnished for his regular use. The word “occasionally” helps, but if Kevin uses the roommate's car regularly, the regular-use exclusion can bar coverage. The PAP does not provide collision coverage for the roommate's car because it is not an insured vehicle; the roommate's own policy would handle physical damage, subject to that policy's deductible and any permissive-use issues.

Judgment point: liability coverage for a non-owned auto and physical damage to that auto are different questions. Kevin's PAP may defend him for the roommate's car but will not repair it.

For Kevin:

• Stop relying on the PAP for delivery. Ask the insurer about a business-use endorsement or a commercial auto policy for the pickup.
• If he continues delivery, a commercial auto policy-or a hired/non-owned endorsement on the shop's policy-is the proper structure.
• Consider higher liability limits and an umbrella, because delivery creates frequent exposure and a serious injury can exceed 100/300/50 quickly.

For the pizza shop:

• Add hired-auto and non-owned-auto coverage to its commercial auto policy, or require drivers to carry commercial coverage and verify it.
• List regular drivers or maintain a driver-qualification program; confirm the policy does not exclude scheduled drivers.
• Check whether the shop's policy covers employee-owned vehicles used for delivery, and whether the driver is an employee or independent contractor.

For the family:

• Tell the PAP insurer about the delivery use. Nondisclosure can lead to rescission or denial.
• Do not assume the shop's policy covers Kevin's pickup just because the shop has commercial auto coverage.