Commercial Insurance Products and Coverage
What commercial auto insurance covers
Commercial vehicle insurance protects businesses operating vehicles. Basic Autoplan coverage is compulsory and includes third-party liability (minimum $200,000), accident benefits, and uninsured motorist protection. Optional coverages include increased liability limits, collision, comprehensive, and specified perils. Commercial policies may add endorsements for hired autos, non-owned autos, and cargo.
Key concepts
Third-party liability pays others when the insured is at fault for bodily injury or property damage. Collision pays for damage to the insured vehicle from impact, regardless of fault. Comprehensive covers theft, fire, vandalism, and weather. Accident benefits pay medical and rehabilitation costs for the insured and passengers regardless of fault. Uninsured motorist protection responds when an at-fault driver has no insurance.
Traps
- Assuming liability covers damage to the insured's own vehicle; it does not.
- Confusing comprehensive with collision: a deer strike is usually comprehensive, while hitting another car is collision.
- Forgetting that basic Autoplan liability is a minimum, and higher limits must be purchased.
- Overlooking that business use may require a commercial policy rather than a personal one.
Worked example
A delivery van with collision and a $1,000 deductible is damaged in a single-vehicle crash. Repair cost is $4,500. Collision pays $3,500 after the deductible. If instead the van were stolen and recovered damaged, comprehensive would apply.
Rule of thumb
Ask "whose property is damaged?" If it is someone else's, think liability; if it is the insured's own vehicle, think collision or comprehensive.