Business Auto Insurance

Business Auto Insurance: Covers one or more vehicles used for your business.

There are various types of policies available to provide insurance for vehicles owned or leased by a business. Automobiles, trucks, vans, etc. can all be insured, with the type and cost of coverage depending on the business use.

Most Business & Commercial Auto policies provide coverage for damage to the vehicle and for liability for bodily injury and physical damage to others. Policies can be expanded to include additional coverage's such as medical payments, uninsured motorists, employees' cars used in the service of the employer, etc...
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A special garage policy is also available for those business engaged in auto sales, auto repair, etc. In addition to the coverage's provided under most Business/Commercial Auto policies, the garage policy pays for damage to customers' autos when in the care or control of the insured -- and for the situations usually covered by general liability insurance.

Check with your Expert Associate for more information on the wide variety of coverage's available for Business/Commercial Auto policies.

Typically, Business/Commercial Auto Insurance is a policy consisting of several different coverage's. Some types of coverage are designed to provide protection in the event of a claim brought against you as the result of an accident. Others are meant to protect you and your property regardless of fault. Businesses can obtain auto insurance coverage for any vehicle they use - whether personal, business, or hired. 



Definitions: Depending on your needs and legal requirements, your Business Auto Insurance policy may include some or all of the following coverage definitions: 

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1. ANY AUTOMOBILE: Coverage is provided for any auto, including autos owned by the insured, autos the named insured hires or borrows from others, and other non-owned autos used in the insured's business.

2. COLLISION COVERAGE: This coverage provides protection against loss or damage to a covered auto or a non-owned auto resulting from the impact with another vehicle or object. Collision losses are paid regardless of fault.

3. COMPREHENSIVE COVERAGE: Comprehensive coverage provides protection against loss or damage to a covered auto resulting from loss other than a collision or upset. This coverage also provides for supplemental payments for transportation expenses in the event of total theft of a covered auto or a non-owned auto. Coverage begins forty-eight hours after the theft.

4. HIRED AUTO: Coverage is provided only for autos leased, hired, rented, or borrowed for use in the named insured's business.

5. LIABILITY COVERAGE: The liability coverage of the commercial auto policy provides protection against legal liability arising out of the ownership, maintenance, or use of any insured automobile. The insurer agrees to pay damages for bodily injury or property damage for which the insured is legally responsible because of an automobile accident with a covered auto of the insured. The insuring agreement also states that in addition to the payment of damages for which the insured is legally liable, the insurer also agrees to defend the insured for all legal defense costs. The defense costs are in addition to the policy limits.

6. MEDICAL PAYMENTS COVERAGE: The insuring agreement states that the insurer will pay all reasonable and necessary medical and funeral expenses incurred by the insured because of bodily injury caused by an accident. The insured is the named insured or the named insured's employees or guests or any other person occupying a covered auto. These payments are made without regard to fault.

7. NON-OWNED AUTOS: Coverage is provided only for autos not owned, leased, hired, or borrowed by the named insured. Coverage includes autos owned by the insured's employees or members of their households, but only while used in the named insured's business or personal affairs.

8. OWNED AUTO: Coverage is provided for all autos owned by the named insured. The owned auto symbol is used for liability insurance only.

9. PERSONAL INJURY PROTECTION: Personal Injury Protection (PIP) is an endorsement that adds No-Fault benefits. No-Fault means that in the event of an automobile accident, each party collects from his or her own insurer regardless of fault. The PIP endorsement is only available in certain states with No-Fault Laws. The endorsement applies only to bodily injury and not to property damage. (As of the time of this writing, The state of Michigan is the exception to property damage.) No-Fault Laws vary widely from state to state.

10. RENTAL REIMBURSEMENT: The business auto policy provides a coverage extension if an auto is insured for comprehensive or specified cause of loss coverage which insures against loss of use of a covered auto only if the auto is a private passenger type auto and is stolen. The coverage extension pays up to a daily limit of $10 and a maximum limit of $300. Payments begin forty-eight hours after the theft and end when the insured auto is returned or when the insurer has paid the insured for the auto. However for broader coverage, the insured can pay an additional premium for rental reimbursement coverage. Rental reimbursement pays the cost of renting a substitute auto for replacement of any covered auto that has suffered a covered loss. The daily and maximum limit for this coverage varies among insurers.

11. SPECIFIED CAUSE OF LOSS: This provides coverage against loss from fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, or vandalism, and from the sinking, burning, collision or derailment of a conveyance transporting the covered auto.

12 . TOWING AND LABOR: When this coverage is added, the insurer pays up to a stated amount for towing and labor costs each time a covered auto or non-owned auto is disabled.

13. UNDERINSURED MOTORIST: This coverage is added to supplement the Uninsured Motorist Coverage. The coverage applies only when the other driver has liability limits at the time of an accident which may be insufficient to pay for damages for which that other driver is responsible. This is when the insured's underinsured motorist coverage would apply and payment for the difference could be made. The two coverage's are mutually exclusive and do not overlap or duplicate each other.

14. UNINSURED MOTORIST: This insuring agreement pays for bodily injury to an insured injured by an uninsured motorist, a hit-and-run driver, or a driver whose insurer becomes insolvent. These benefits are paid under the named insured's policy. 

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How Much Coverage Do I Need?

Most states have minimum requirements for auto insurance, including Bodily Injury and Property Damage Liability coverage. In addition, some states require other types of coverage, such as uninsured motorist, underinsured motorist, medical payments, and/or personal injury protection. For more information on requirements specific to your location, please ask your Expert Associate.

Although state law does not require comprehensive or collision protection coverage's, you may be required to obtain these coverage's if your car is leased or purchased through a loan.

Your Expert Associate can help you determine whether the benefits of additional coverage (beyond any minimum requirements) outweigh the cost.

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What Factors Affect My Premium?

Listed below are some of the factors that determine your premium for Business Auto Insurance:

  • Drivers' demographics: Age, gender, and marital status of each driver.
  • Driving history: Number of years each driver has held a license. Violations and accidents within the last 3 to 5 years.
  • Type of car: Year, make, and model. Cars that are more expensive to repair may result in higher premiums. Safety and anti-theft devices may reduce premiums. 
  • Car use: Annual mileage below a certain amount may reduce your premium. 
  • Number of cars: The more cars you insure, the higher your premium is likely to be. However, you may be able to obtain a discount for multiple cars.
  • Location of business: Premiums may vary state-to-state. In addition, your premium may be higher if you're located in a metropolitan area. 
  • Limits and deductibles: The higher your policy limits (e.g. limits for liability and property damage), the higher your premium is likely to be. The higher your deductibles, the lower your premium is likely to be.
  • Optional and add-on coverage's: Additional coverage's typically increase your premium.

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