Commercial insurance coverage for physical auto damage

Commercial insurance coverage for physical auto damage

Comprehensive car insurance protects companies from financial losses caused by damage to cars they own or rent. It is usually provided as part of a business authorization policy. Unlike automobile liability insurance, which is required by state law, comprehensive automobile insurance is purchased voluntarily.

Do you need it?

Should your company insure its vehicles against property damage? The answer depends on several factors. First, if you lease or finance cars, the leasing company or lender will likely require property damage insurance on those vehicles. Other relevant factors include the age and condition of your vehicles and the features they contain. These affect the value of your cars. Any insurance benefit you receive for property damage is based on the actual cash value of the vehicle prior to the loss. Cars depreciate in value as they age, and older cars may not be worth enough to insure them. Two other considerations are the cost of property damage insurance. The financial situation of your company. If you decide to waive insurance, make sure that your company can afford to have a "totally" Vehicle to be replaced out of pocket.

Covered causes of loss

A commercial auto policy offers three options for property damage coverage: Comprehensive, Specified Causes of Loss and Collision.


Comprehensive coverage applies to damage to an insured car from causes other than the vehicle overturning or its collision with another object. Comprehensive coverage is designed to dovetail with collision coverage. Most damage not covered under Collision is covered under Comprehensive. Examples are damage by storm, hail, fire, vandalism or theft.

Also covered by comprehensive insurance are broken glass and damage caused by flying objects, falling objects or collision with a bird or animal. A stone rolls off a hill. Falls on your pickup truck. Impact causes a large dent in the hood of your truck.
– A heavy pine cone falls on the windshield of a private car you own, breaking the glass.
– You are driving a company car when a deer takes off in front of you. You slam on the brakes but can't avoid a collision with the deer. The impact damages the front of your truck.
Specified causes of damage

Coverage for specified causes of loss is only available for commercial autos (trucks and trailers), not private passenger vehicles. It covers damage from fire, lightning, explosion, flood, theft and some other named perils. It is a cheaper alternative to comprehensive insurance.


Collision insurance applies to damage to an insured car caused by its collision with another object or by the overturning of the vehicle. The "object, with which a car collides can be another vehicle or a stationary object, such as a tree. If an insured car suffers glass breakage in a collision accident, the glass breakage may be covered as collision damage, not as a full loss.

Suppose an employee of yours is driving a company car during a heavy rainstorm. The vehicle skids on a wet road and hits a tree. The windshield of the truck is smashed. The right front fender is damaged. Since collision damage occurred, you chose to cover the broken windshield under collision coverage. This ensures that both the windshield and the fender damage are subject to a (collision) deductible.

If you have opted for broken glass coverage under comprehensive insurance, two deductibles apply. The glass breakage is subject to your deductible for comprehensive, while the fender bender is subject to your deductible for collision.

Covered cars

When you buy property damage insurance, you can choose to cover all the vehicles you own or a subset of those vehicles, such as. B. Private passenger vehicles only, wish to cover. You can also choose property damage coverage for rental cars. The symbols used in the declarations to designate the insured cars indicate the types of cars that are insured for property damage.


Physical damage coverage does not apply to damage caused by any of the following:

– War and associated dangers
– Racing or stunt activities
– depreciation
– Wear and tear, freezing, mechanical or electrical failure.
– Blowouts and other tire damage
The last two peril groups (wear and tear, breakdowns, etc.) are excluded because they are considered maintenance issues. These exclusions do not apply to an insured car that has been stolen.

Limits and deductibles

With a few exceptions, property damage coverage is not subject to any limit. Instead, your insurer will pay the lower amount of:

– The actual cash value of the damaged vehicle or equipment; or
– the cost of repair or replacement
If the repair costs of your vehicle exceed the actual cash value, your insurer will probably declare the vehicle a total loss.

A separate deductible applies to each property damage coverage. For example, you can take out a fully comprehensive insurance policy with a deductible of 500 USD. A collision insurance with a deductible of 1.000 USD choose.000 USD choose. You can reduce your property damage premiums by increasing your deductibles.

A damage payment you receive for property damage, minus your deductible (d. H. Your deductible has already been deducted) be. Alternatively, the insurer may calculate your loss benefit without a deductible. Then charge them the deductible.

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