Don’t make the mistake of expecting
your Personal Auto Policy to cover a vehicle
that is used in your business.
When you purchase a Personal Automobile Policy,
that policy is intended to cover those exposures usual
to personal use only – driving for personal pleasure,
to and from work, and for family outings. A Personal
Automobile Policy provides protection only for the individual
insured person(s) named on the policy. Also, vehicles
involved in an accident while engaged in company business
may not be covered by your Personal Auto Policy.
a few exceptions, businesses need a Business Automobile
Policy for proper protection of their business vehicles.
A Business Auto Policy will protect the interests and
assets of the business shown as the
Insured on the policy.
Regardless of how your vehicle is used, most states
require that you carry a certain minimum limit of Auto
Liability Insurance. Minimum coverage, however, may
not provide sufficient protection for your business.
Types of coverage and limits available vary state by state.
Basic coverages you might expect to find on a Business
Auto Policy are:
- Liability - Offers protection against
claims that you (or someone driving your covered car)
caused property damage or bodily injury to a third
party while operating a covered business vehicle.
This coverage applies only if the driver is considered
legally responsible for the damage.
- Medical Payments - Assures the driver
and passengers in your business vehicle (who are not
covered by Workers Compensation) payment of medical
expenses related to an auto accident.
- Personal Injury Protection (PIP) -
Provides no-fault insurance for residents of states
where it is required. This means the driver and any
passengers in your business vehicle are covered under
your policy, regardless of who is responsible for
- Uninsured Motorist - Pays for injury
expenses incurred should your driver or passengers
be involved in an accident with an uninsured motorist.
This coverage also provides protection for a hit-and-run
accident or an accident with a driver who has less
insurance than required by law. Underinsured Motorist
provides coverage when the other driver is found legally
responsible for an accident and has coverage, but
not enough to cover your injuries. If your coverage
limits are higher than those of the at-fault driver,
this coverage will absorb the additional expenses.
Because each state has its own uninsured motorist
laws, Un/Underinsured coverage varies. In most states
this coverage applies to bodily injury only, but property
damage coverage is available in some states.
- Collision Coverage - Pays for damage
to your business vehicle caused by accidental impact
with another vehicle or object, or if your vehicle
overturns. The maximum amount paid is limited to the
actual cash value of your vehicle, which is often
referred to as the "local market value,"
less the collision deductible. The local market value
is only a starting point in determining the payoff,
because actual cost may be more or less depending
on the condition of the car.
- Comprehensive Coverage - Pays for
damage to your business vehicle caused by a situation
other than a collision, including breakage of glass,
falling objects, fire, theft, windstorm, hail, water,
flood, malicious mischief, vandalism, and impact with
a bird or animal. The maximum amount paid is limited
to the actual cash value of your vehicle less the
"other than collision" deductible.
Damages not covered by comprehensive coverage include
normal wear and tear, mechanical or electrical breakdowns,
and flat tires.
- Additional/Optional Coverages
- Hired & Non-Owned Vehicle Liability
Coverage extends liability protection
to your business for vehicles rented or borrowed
by the business, or for other non-owned vehicles,
like employees’ cars, used for your business.
- Hired Vehicle Physical Damage Coverage
provides coverage for physical damage (Comprehensive
& Collision coverages) to the vehicle that
is rented for company business.
- Towing and Labor pays for
towing and labor costs each time your private passenger-type
business vehicle is disabled. Covered labor must
be performed at the place where your car is disabled,
and there is usually a limit to the dollar amount
applied to each loss.
- Rental Reimbursement pays
for the cost of renting a replacement vehicle
when yours is damaged by a situation covered by
comprehensive or collision coverage, and when
your car is out of commission for more than 24
- Lease Gap Coverage is available
for your company vehicles that are leased and
for which you’ve purchased physical damage
coverage. If an auto you lease is totaled in a
covered accident, this pays for the outstanding
balance of the lease if it exceeds the actual
cash value of the vehicle at the time of loss.
- Sound Receiving and Reproducing Equipment
This additional coverage pays for loss to electronic
equipment designed solely for reproduction of
sound (radio, tape deck, CD player, etc.), as
long as it is permanently installed in the vehicle
at the time of loss.
This description of coverage is not an insurance contract.
Your policy is the contract that specifies and fully
describes your coverage. Conditions and exclusions will
apply. Not all coverage described is available in all