Do You Understand what Your Commercial Auto Policy Really Covers?

Posted by on May 12, 2015 in News | 0 comments

Do You Understand what Your Commercial Auto Policy Really Covers?

Although certain commercial auto coverage elements aren’t necessarily a requirement, it’s very important to know what they are and exactly what they cover. These include:

Commercial Auto Liability

In case of an event that you or your company’s driver might cause an at fault accident, this element provides property damage and bodily injury coverage to third-parties. Normally businesses carry higher limits of auto liability than most state limits require. These range from state minimum requirements up to $1 million in combination with single limits of liability for property damage and bodily injury.

Another coverage that can be added to a policy by endorsement Is called hired and non-owned auto liability and has two triggers:

  1. It provides business auto liability coverage for rental cars.
  2. It provides excess liability over the employee’s personal auto policy when using their own personal vehicle for business use.

Personal Injury Protection or Medical Payments

Even if the accident is your fault, personal injury protection and medical payments provide you reimbursement for medical expenses and a percentage of lost wages associated with an auto accident. You can always purchase medical payments coverage with limits ranging from $5,000 to $25,000 even if your state doesn’t offer personal injury protection.

Uninsured and Under-insured Motorist 

For those drivers who don’t have enough insurance to cover the damages caused to you when they are at fault in an auto accident, uninsured and under-insured motorist coverage provides property damage and bodily injury coverage.  Even though these are two separate coverage triggers, only one provides coverage element in a commercial auto policy. In some states, there is a deductible associated with the property damage portion of these coverage’s, with limited ranges for bodily injury and property damage from minimum liability limits to $1 million combined single limits.

Physical Damage

Comprehensive and collision coverage’s fall under physical damage such as:   fire, theft, flood, hail, vandalism, and colliding with an animal. For any type of collision other than with an animal, collision provides coverage on an actual cash valuation (replacement cost less depreciation) only basis.  There are policies that provide stated amount coverage or agreed value coverage for example:  If you own a high-end vehicle, you should invest in stated amount or agreed value coverage so you are adequately protected.

For damage to vehicles you rent under your business name, you will also need hired car physical damage to provide coverage.  The commercial auto policy does not provide coverage to the rental car under the liability section, unlike the personal auto policy, which does provide coverage. In order to have the protection, you must add this coverage to your policy. When your vehicle is disabled due to a covered peril, coverage for renting cars is only available for private passenger vehicles.

There are other coverage’s that you can include on your commercial auto policy, contact me today to make sure your business is adequately covered!

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