What does commercial auto insurance cover?
Commercial auto insurance covers expenses and liabilities from accidents involving company-owned or operated vehicles. It can also provide coverage when a vehicle is stolen or vandalized, and for miscellaneous damage like a chipped windshield from a stray rock.
Commercial auto insurance covers:
When you or one of your employees cause an accident with an insured vehicle, your commercial auto insurance helps pay for any damages you caused. This can include repair costs to either vehicle or personal property within the vehicle, legal expenses, and compensation paid to persons injured if you are found legally liable.
For example, you rear-end the car in front of you on your way to a client delivery. If the accident is deemed your fault, the commercial auto policy will provide coverage to repair each vehicle and provide compensation to the injured party for their injuries (if applicable).
There is an exception to this rule in no-fault states. Laws in no-fault states require all drivers in an accident to file a claim with their own insurance carrier regardless of who is at fault. A driver in a no-fault state has insurance to cover their own damage and injuries. In these states, drivers are also required to have personal injury protection as part of their auto insurance policy.
You have coverage for certain causes of loss that are not related to a car crash. If a vehicle is vandalized, stolen, damaged due to certain weather, or impacted by an object, these types of losses are covered by your commercial auto insurance. This is known as comprehensive coverage.
For example, if your car is struck by a tree branch while parked you would have coverage if you purchased comprehensive coverage.
If your passenger is injured in an accident while in your vehicle which is insured under a commercial auto policy, they are eligible for medical payment coverage regardless of fault. An injured employee would be covered under a workers' compensation insurance policy.
For example, a construction foreman is driving between job sites and crashes into another vehicle. The operator of the other vehicle is brought to the hospital for a routine evaluation. The commercial auto insurance policy will provide coverage for the expense of the ambulance ride and further hospital bills.
Even though car insurance is required by law in most states, there are still uninsured or underinsured drivers. If an uninsured or underinsured driver causes an accident and is unable to cover the damages, your commercial auto insurance might have to cover the expenses through the policy’s uninsured motorist coverage.
If a company-insured vehicle is connected to a trailer and is involved in an accident, then usually it is covered under the commercial auto policy. There are scenarios where heavier or longer trailers will need special coverage.
What does commercial auto insurance NOT cover?
There are two vehicle-related scenarios that commercial auto will not cover. These are:
Leased or rented vehicles
If your company has a long-term lease or uses short-term rental services, these vehicles will not be covered under the typical commercial auto insurance policy. Usually, these vehicles will require a hired and non-owned auto policy for coverage.
Commercial auto insurance will not cover personal vehicles. If your business has employees that frequently use their personal vehicles for work-related activities, you will need a hired and non-owned auto insurance policy.