What is Primary Use?
Primary use is the term used to describe the main function or purpose of an insured asset, such as a vehicle or property, as it relates to an insurance policy. Insurance companies assess primary use to determine risk levels and calculate premiums. For example, a vehicle used primarily for commuting may have different insurance requirements compared to a vehicle used for business purposes or recreational driving.
Understanding primary use is crucial when obtaining coverage, as using an asset for purposes other than what is stated in the policy could lead to claim denials. In homeowners insurance, a property’s primary use as a residence affects coverage options compared to a property used for rental or business purposes.
Correctly identifying the primary use of insured items ensures proper coverage, helping avoid complications in the event of a claim. For instance, if a homeowner rents out part of their residence, it may change the primary use of the property and affect the insurance policy terms.