What Does Commercial Auto Physical Damage Insurance Cover?

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What Does Business Auto Physical Damage Cover?

What Does Commercial Auto Physical Damage Insurance Cover?

What Does Commercial Auto Physical Damage Insurance Cover?. Coverage can be purchased to protect the insured vehicle if it is damaged.

Collision coverage applies if the vehicle strikes or is struck by something.

Comprehensive applies to any other type of physical damage loss. This coverage is generally required when a lien holder is involved and is recommended for most newer cars.

What does commercial auto physical damage insurance cover? Garagekeepers Insurance is also physical damage coverage but it only covers damage to customers' cars that have been left in the care of the insured.

What does commercial auto physical damage insurance cover? Business auto physical damage includes comprehensive and collision insurance that covers the costs to fix or replace your vehicle if it is damaged, vandalized or stolen.

Below are some answers to commonly asked commercial auto physical damage insurance questions:

What Type Of Vehicles Does Business Auto Insurance Policy Cover?

The Business Auto Policy contains extensive declaration pages that permit the insured to select from a series of coverage types and vehicles that are to be insured. A set of symbols is provided, and coverage is afforded only for those listed symbols. The symbols define coverage as follows:

  • 1 - All autos are covered. No additional symbols are needed.
  • 2 - All autos you own are covered.
  • 3 - Only private passenger autos you own are covered.
  • 4 - Only autos you own that are not classified as a private passenger are covered.
  • 5 - Autos you own for which no-fault coverage is required are covered.
  • 6 - Autos you own for which uninsured motorists coverage is required are covered.
  • 7 - Only scheduled autos are covered.
  • 8 - Any auto you hire, borrow, or lease is covered.
  • 9 - Any auto not owned by you but used by an employee, volunteer or partner for your business is covered but only for your benefit.
  • 19 - Mobile equipment if subject to financial responsibility laws

So what does commercial auto physical damage insurance cover? The coverages and the types of vehicles insured are triggered by the symbols, and all vehicles of a similar type are covered automatically until the end of the policy period without having to notify the company.

When symbol 7 (Specified Autos Only) is entered, a newly acquired vehicle is covered only when: the new vehicle is replacing a specified vehicle; the company insures all the vehicles owned by the insured; and the company is notified within 30 days of the purchase. Protection is limited to the coverages that apply to all insured vehicles.

When symbol 19 (Mobile equipment subject to compulsory or financial responsibility or other motor vehicle insurance law only) is entered Business Auto coverage is provided for property that is defined as mobile equipment but only when that mobile equipment is subject to motor vehicle registration and/or licensing laws. The symbol applies only in states with such registration and/or licensing laws.

Manuscript Symbol

The commercial auto physical damage insurance coverage form does not address this symbol, but it is available by endorsement as an additional manuscript symbol. It may be added by using CA 99 54–Covered Auto Designation Symbol. Symbol 7 is used with the Business Auto Physical Damage Coverage Form. A complete description of covered autos must be entered in the space provided.

Newly Acquired Vehicles

Coverage for vehicles acquired during the policy year is based on the symbol(s) entered for the coverages being provided. If symbols 1, 2,3,4,5, 6 or 19 apply, all newly acquired vehicles are covered until the end of the policy year.

When the symbol is 7 and the insurance company provides coverage for all owned vehicles, coverage applies automatically provided the insurance company is notified within 30 days of the acquisition. If the insurance does not insure all of the owned vehicles, but the vehicle is replacing a vehicle that is no longer owned, coverage will also apply if notice is provided within 30 days of the replacement.

What Property Is Excluded From A Commercial Auto Insurance Policy?

What does commercial auto physical damage insurance cover? The following types of property are excluded:

Electronic Devices and Accessories

Any type of electronic equipment used to receive, reproduce, or transmit audiovisual or data signals whether or not permanently installed and all accessories used with electronic equipment. There is an exception based on how the equipment is installed and where it is installed on the vehicle. However, this coverage is subject to a $1,000 sublimit.

Electronic Devices Media

Tapes, records, discs, and similar property or data electronic devices designed to be used with audio, visual, or data electronic equipment. This exclusion is extremely broad because of changes in media. Tapes and CDs are excluded as well as DVDs and equipment that can be attached to any media system within the auto.

Speed Detection Devices

Radar and laser jamming, detecting, eluding, or disrupting equipment designed or used to detect speed.

What Does Commercial Auto Physical Damage Insurance Cover?

Commercial Auto Accident

These are the coverages listed on the declarations.

The coverage(s) that apply to a specific vehicle is based on the symbols entered next to the coverage.

What does commercial auto physical damage insurance cover?

When most people think of physical damage they are thinking about comprehensive and collision coverage:

Comprehensive Coverage

This is loss or damage from any cause unless specifically excluded. A key exception under this coverage is that it does not apply to loss or damage that results from a covered auto colliding with another object or overturning.

Collision Coverage

This is loss or damage caused by the covered auto colliding with another object or by overturning. The term "another object" is not defined so it can be any object such as an animal, bird, building, pedestrian, tree, road sign, or bridge as well as another vehicle.

Specified Causes of Loss

This is loss or damage to a covered auto that is due to fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, or vandalism. Loss because a conveyance transporting the vehicle sinks, burns, collides, or derails is also covered.


This coverage refers to payment for expense of towing and labor costs. However, only labor expense that is incurred at the place of a covered vehicle's disablement is eligible coverage. In other words, towing expenses are distinct from repairs that occur at a repair shop.

Glass Breakage–Hitting a Bird or Animal–Falling Objects or Missiles

This is not coverage but more of a clarification. If glass breaks due to a bird, animal, or falling object, the glass breakage is paid as comprehensive or specified coverage. If glass breaks due to other types of collision, it is paid as collision.

Transportation Expenses

When a covered private passenger auto with either comprehensive or specified causes of loss coverage is stolen, temporary transportation costs of $20 per day are paid starting 48 hours after the theft and ending when the vehicle is recovered or the loss is settled. The maximum payout is $600 unless increased by endorsement.

Loss of Use Expenses

If Hired Auto Physical Damage is purchased, the loss of use expenses that must be paid to a rental car agency are covered up to $20 per day and $600 maximum but only if the loss of use expenses are caused by Comprehensive, Specified Causes of Loss or Collision.

How Much Does Commercial Auto Physical Damage Insurance Cover?

What does commercial auto physical damage insurance cover? The most paid for loss or damage in any one accident is the lesser of the actual cash value of the stolen or damaged property or the cost to repair or replace the stolen or

damaged property with property of like kind and quality.

When a repair results in the betterment of the vehicle, the insurance company does not pay for that betterment.

In case of a total loss, adjustments are made for the auto's depreciation and physical condition to establish the actual cash value.

Conditions Affect Value

Stated Amount Insurance amends the limit of insurance for physical damage coverages. For vehicles on the endorsement schedule, the limit for physical damage coverage is changed to the least of the actual cash value, the cost to repair or replace, or the limit specified.

This endorsement should be used with caution because it could decrease the settlement amount.


The insurance company pays for repair, return, or replacement of damaged or stolen property for each covered auto minus the deductible amount on the declarations. However, no deductible applies to a fire or lightning loss if an auto has comprehensive coverage.

Where Is The Insurance Covered?

The coverage territory is the United States of America, its territories and possessions, Puerto Rico, and Canada. Coverage also applies to covered autos being moved between points in the coverage territory.

What Are The Insured's Duties?

The insurance company is not obligated to pay for a loss unless the insured honors the duties outlined in the policy. The most important duty is to provide notice to the insurance company of a loss. It must include details about the loss including names and addresses of witnesses. The insured must also notify the police in case of theft.

The insured must act prudently by protecting the auto from further damage. The insurance company must be permitted to inspect the damaged vehicle and all records regarding the loss.The insured must agree to legal examination and be willing to sign any statements made.

Loss Payment

The insurance company chooses how the loss will be adjusted. It can pay for the damage or arrange for the repair and replacement. It will return stolen property and repair any damage to the vehicle or take such property at an agreed upon value. An important note is that any payment made must include any applicable sales tax.

What Does Commercial Auto Physical Damage Insurance Cover? - The Bottom Line

So what does commercial auto physical damage insurance cover? Business auto physical damage insurance protects businesses from financial losses resulting from damage to vehicles they own or rent. It is usually provided as part of a business auto policy.

Where commercial auto liability coverage is mandated by state laws, commercial auto physical damage insurance is purchased voluntarily and not required by law - although might be required for a lease or contract.

More Helpful Commercial Insurance Articles

Read other informative articles on small business commercial insurance including costs and coverages.

Small Business Insurance Articles

Get useful tips and information about how much commercial insurance costs, small business risks and exposures, how insurance regulations effect your businesses' and detailed descriptions of coverages and exclusions and more. Most small businesses need to buy the following four types of insurance at a minimum to cover their operations from every day risks:

Property Insurance: This policy covers a business if the property used in the business is damaged or stolen as the result of common perils like fire or theft. Commercial property insurance covers the buildings, structures and also business personal property - which includes furniture, inventory, raw materials, machinery, computers and other items.

Liability Insurance: Any company can be sued. Slip-and fall lawsuits are very common and be costly. Customers can claim you injured them or damaged their property - and lawsuits are very expensive. Commercial liability insurance pays damages and can include attorney's fees and other legal expenses. It also ca pay for the medical bills of injured third parties

Commercial Auto Insurance: For vehicles owned by the business. Commercial auto insurance pays bodily injury or property damage costs for which the business is found liable - up the the policy limits for liability and property damage.

Workers Compensation Insurance: In almost every state employers must provide workers comp when there are W2 employees. Workers compensation pays for the medical care of employees and can replace a portion of lost wages - regardless of who was at fault for the injuries.

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