What Does Commercial Auto Physical Damage Insurance Cover?

Commercial auto physical damage insurance is a type of insurance policy that is designed to protect businesses against financial losses arising from damages to their commercial vehicles. This insurance policy covers a wide range of damages, including those resulting from accidents, theft, and vandalism. Here is a closer look at what commercial auto physical damage insurance covers:

• Collision damage: This type of damage occurs when a commercial vehicle collides with another object, such as another vehicle or a stationary object. Collision damage coverage pays for the repair or replacement of the vehicle.
• Comprehensive damage: Comprehensive damage coverage pays for damage to a commercial vehicle that is not the result of a collision. This includes damage from weather events, theft, and vandalism.
• Fire and theft damage: This type of coverage is specifically designed to protect businesses against the financial losses associated with the theft or damage of a commercial vehicle due to a fire.
• Glass damage: Commercial auto physical damage insurance also covers the repair or replacement of any broken windows or windshields that result from accidents or other events.
• Custom equipment coverage: Many businesses rely on specialized equipment for their operations. This coverage provides protection for custom equipment that is damaged or stolen.
• Loss of use coverage: If a commercial vehicle is damaged and needs repairs, it may be out of commission for some time. Loss of use coverage provides businesses with the financial means to rent a replacement vehicle until their own is repaired.

It is important to note that the specific coverage provided by commercial auto physical damage insurance can vary depending on the policy. Businesses should carefully review the terms and conditions of their policy to ensure that they have the coverage they need.

In addition, businesses should work closely with their insurance agent or broker to identify any potential gaps in coverage and take steps to address them. This may involve purchasing additional coverage or adjusting policy limits to better align with their specific needs.

In conclusion, commercial auto physical damage insurance provides businesses with valuable protection against financial losses arising from damage to their commercial vehicles. By understanding what this insurance policy covers and working with a knowledgeable insurance professional, businesses can ensure that they have the protection they need to operate with confidence.

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 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.

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.

Towing

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.

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.

Deductible

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.