Get Behind the Wheel with Moody
Most businesses should be carrying a Business Automobile Policy for proper protection of their business vehicles. A Business Auto Policy will protect the interests and assets of the business shown as the insured on the policy. It’s important to note that a Personal Auto policy typically doesn’t cover personal vehicles that are involved in accident while engaged in company business.
Regardless of how your vehicle is used, most states require that you carry a certain minimum limit of Auto Liability insurance. Minimum coverage, however, in most cases, may not provide sufficient protection for your business.
Under the Hood of a Business Auto Policy
Types of coverage and limits available vary state by state. Basic coverages you might expect to find on a Business Auto Policy include:
- Liability: Offers protection against claims that you (or someone driving your covered car) caused property damage or bodily injury to a third party while operating a covered business vehicle. This coverage applies only if the driver is considered legally responsible for the damage.
- Medical Payments: Assures the driver and passengers in your business vehicle (who are not covered by Workers’ Compensation) payment of medical expenses related to an auto accident.
- Personal Injury Protection (PIP): Provides no-fault insurance for residents of states where it is required. This means the driver and any passengers in your business vehicle are covered under your policy, regardless of who is responsible for the accident.
- Uninsured Motorists: Pays for injury expenses incurred should your driver or passengers be involved in an accident with an uninsured motorist. This coverage also provides protection for a hit-and-run accident or an accident with a driver who has less insurance than required by law. Underinsured Motorists provides coverage when the other driver is found legally responsible for an accident and has coverage, but not enough to cover your injuries. If your coverage limits are higher than those of the at-fault driver, this coverage will absorb the additional expenses. Because each state has its own uninsured motorist laws, Un/Underinsured coverage varies. In most states this coverage applies to bodily injury only, but property damage coverage is available in some states.
- Collision Coverage: Pays for damage to your business vehicle caused by accidental impact with another vehicle or object, or if your vehicle overturns. The maximum amount paid is limited to the actual cash value of your vehicle, which is often referred to as the “local market value,” less the collision deductible. The local market value is only a starting point in determining the payoff, because actual cost may be more or less depending on the condition of the car.
- Comprehensive Coverage: Pays for damage to your business vehicle caused by a situation other than a collision, including breakage of glass, falling objects, fire, theft, windstorm, hail, water, flood, malicious mischief, vandalism, and impact with a bird or animal. The maximum amount paid is limited to the actual cash value of your vehicle less the “other than collision” deductible.Damages not covered by comprehensive coverage include normal wear and tear, mechanical or electrical breakdowns, and flat tires.
Additional/Optional Coverages
- Hired & Non-Owned Vehicle Liability Coverage extends Liability protection to your business for vehicles rented or borrowed by the business, or for other non-owned vehicles, like employees’ cars, used for your business.
- Hired Vehicle Physical Damage Coverage provides coverage for physical damage (Comprehensive & Collision coverages) to the vehicle that is rented for company business.
- Towing and Labor pays for towing and labor costs each time your private passenger-type business vehicle is disabled. Covered labor must be performed at the place where your car is disabled, and there is usually a limit to the dollar amount applied to each loss.
- Rental Reimbursement pays for the cost of renting a replacement vehicle when yours is damaged by a situation covered by Comprehensive or Collision coverage, and when your car is out of commission for more than 24 hours.
- Lease Gap Coverage is available for your company vehicles that are leased and for which you’ve purchased Physical Damage coverage. If an auto you lease is totaled in a covered accident, this pays for the outstanding balance of the lease if it exceeds the actual cash value of the vehicle at the time of loss.
- Sound Receiving and Reproducing Equipment: This additional coverage pays for loss to electronic equipment designed solely for reproduction of sound (radio, tape deck, CD player, etc.), as long as it is permanently installed in the vehicle at the time of loss.
This description of coverage is not an insurance contract. Your policy is the contract that specifies and fully describes your coverage. Conditions and exclusions will apply. Not all coverage described is available in all states.