What does using a covered auto as a public conveyance (taxi) entail in terms of coverage?

Using a covered auto as a public conveyance, such as a taxi, generally means that the vehicle is being used to transport passengers for a fee. Most personal auto insurance policies specifically exclude coverage for vehicles used in this manner, as they are designed for personal use only, not commercial activities. When a vehicle is being used as a taxi or for hire, the risk exposure changes significantly, which is why insurers often exclude coverage for such situations.

This exclusion is important for policyholders to understand because if an accident were to occur while the vehicle is being used in this capacity, the insurance policy would not provide the necessary liability protection, potentially leaving the driver responsible for significant financial burdens resulting from lawsuits, damages, or injuries. Thus, understanding this aspect helps ensure that consumers are aware of their coverage limitations and the need for specialized commercial policies when engaging in passenger transport for payment.