Question

A restaurant is out of business for 3 days after an insured's automobile hits an electrical pole. The pole fails and hits the building, knocking out all electrical power supply. Which of the following is NOT covered under the insured driver's auto policy?

1) Damage to the insured driver's automobile
2) Damage to the electrical pole
3) Damage to the building
4) Loss of business income

Answer 1

The insured driver's auto policy generally covers damage to their own vehicle, the electrical pole, and the building, but the loss of business income for the restaurant is not covered.

Step-by-step explanation:

The question pertains to what is covered under the insured driver's auto policy in the event of an accident where the insured driver's automobile hits an electrical pole, causing damage to the pole, the building, and resulting in a loss of business income for the restaurant. Generally, auto insurance policies cover medical expenses, costs when the policyholder dies, and when a car is damaged, stolen, or causes damage to others. They may also cover when a dwelling is damaged or burglarized.

Regarding the coverage under the insured driver's auto policy:

1. Damage to the insured driver's automobile is likely covered as part of the collision component of an auto policy.
2. Damage to the electrical pole could be covered because it relates to property damage liability.
3. Damage to the building could also be covered through property damage liability.
4. Loss of business income, however, is generally not covered under a personal auto policy because it falls under indirect loss due to business interruption, which typically requires a separate business insurance policy.

In conclusion, the insured driver's auto policy does not typically cover the loss of business income for the affected restaurant, and the business would need its own policy to claim this type of loss.