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Commercial Auto Insurance Purchases – Things To Consider

September 22, 2021

Purchasing commercial auto insurance is different from buying a personal automobile insurance policy. In addition to insuring yourself against claims of bodily injury and property damage involving third parties, you must also maintain comprehensive and collision coverage to protect your own vehicle against unforeseen damages.

There are several important endorsements you may want to consider while when your purchasing your business auto insurance.

Endorsements to consider before purchasing a commercial auto insurance policy

1.Hired Business Automobile Physical Damage coverage endorsement

This endorsement has a limit per unit or vehicle for the physical damage (comprehensive and collision damage) caused to your commercial vehicle. However, you must be sure to check the limit, generally $50,000, before you rent a high-value automobile.

2. Non-Owned Business Automobile Liability coverage endorsement

It can be used when you have employees who use their personal vehicles on your company business even if the exposure is so slight that it only entails errands such as picking up mail or buying office supplies. The endorsement does not replace the employee’s liability insurance. Instead, it protects you as the employer if you are named in a claim due to your employees’ negligence.

3. Employee Hired Auto endorsement

It requires hired auto coverage for both liability and physical damage coverage to be enforced. This endorsement is to be used when employees hire vehicles in their own name rather than the company’s name and use it for business purposes according to the directions of their employer. The effect of this endorsement is to make coverage for these autos primary rather than excess.

4. Rental Reimbursement endorsement

It includes the loss of use of the rental vehicle by the car rental company. The cost per day to rent a vehicle is provided in the commercial vehicle insurance policy. However, if the rented unit is damaged or destroyed in your care, custody, or control you can be held liable for the loss incurred by the rental car company for the time the vehicle was not in use due to repairs or replacement of the unit.

5. Auto Loan Physical Damage Extension

This is an endorsement that provides coverage for the difference between the actual cash value of the damaged commercial vehicle and the loan balance of the unit. Auto Lease Gap Coverage applies when the vehicle is leased rather than purchased.