Which situation would prevent coverage for a rental car under a personal auto policy?

The correct answer acknowledges that various situations can indeed lead to a denial of coverage for a rental car under a personal auto policy. Each of the situations listed—driving without a valid license, using the vehicle for business purposes, and carrying passengers for hire—represents scenarios that typically fall outside the coverage parameters outlined in most personal auto policies.

Driving without a valid license is a fundamental legal requirement; if a policyholder is operating a vehicle without the necessary licensing, the insurer could argue that the policy is void or that coverage is not applicable. Similarly, using a rental car for business purposes can conflict with the terms of a personal auto policy. Most personal policies are designed for personal, recreational use, not for commercial purposes.

Carrying passengers for hire introduces another level of risk that personal auto policies are generally not equipped to handle. This situation implies a business use of the vehicle (such as in ridesharing), which can expose the insurer to greater liability compared to standard personal use.

Because each of these circumstances can independently lead to a lack of coverage, the conclusion that all of them contribute to a situation where coverage is prevented is accurate. In summary, understanding the limitations of personal auto policies under these specific circumstances can help policyholders avoid potential gaps in their