Auto Insurance: What's Included In Business Coverage?

Business auto insurance is a type of insurance that covers all vehicles used by a business, including those that are owned by the business, leased, or owned by employees. It is more extensive than standard commercial auto coverage and is often required by law. It covers both liability and damage, including bodily injury and property damage that may result from a vehicle accident. It also includes uninsured/underinsured motorist coverage and medical payments coverage. The scope of coverage can vary depending on the business's needs and the types of vehicles involved.

Collision coverage

When purchasing collision coverage, individuals must select a deductible, which is the amount they agree to pay out of pocket before the insurance company covers the remaining costs. Choosing a higher deductible can help lower insurance premiums. However, it is important to select a deductible that individuals can afford to pay at any time. Additionally, individuals must provide a stated amount, which is their best estimate of the vehicle's current value, taking into account its age, condition, and any permanently attached equipment.

When making a collision insurance claim, individuals must first pay their deductible, after which the insurance company will cover the remaining costs of repairs or replacement, up to the vehicle's actual cash value. Collision coverage does not include damage to another person's vehicle or property, personal belongings inside the car, or medical costs from injuries sustained in the accident.

Overall, collision coverage is an essential component of auto insurance, providing financial protection and peace of mind for individuals and businesses operating vehicles. It ensures that they are not left financially burdened in the event of a collision, helping to cover the often-high costs of vehicle repairs or replacement.

Comprehensive coverage

As a business owner, you can customise your business auto policy to fit your specific needs. Comprehensive coverage is a valuable addition to your policy, providing protection against a wide range of non-collision incidents that could occur while your vehicles are on the road.

Medical payments (MedPay) coverage

MedPay covers a range of expenses, including health insurance deductibles and co-pays, ambulance fees, hospital visits and stays, nursing care, dental procedures, and funeral costs. It is important to note that MedPay does not cover wage reimbursement for time lost due to injuries.

The coverage provided by MedPay is applicable regardless of who is at fault in the accident and extends beyond the business vehicles to cover the policyholder if they are injured as a pedestrian, a passenger in another vehicle, or when using public transportation.

The cost of MedPay varies depending on the desired level of coverage, with monthly premiums ranging from $2 to $37 per month. When determining the amount of MedPay coverage needed, it is essential to consider the limits of your health insurance policy and the potential medical costs arising from vehicular accidents.

MedPay can provide valuable financial protection for businesses, especially those with employees who regularly drive company-owned, leased, or personal vehicles for work-related purposes. It ensures that medical expenses resulting from accidents are covered, regardless of fault, providing peace of mind and financial security for businesses and their employees.

Personal injury protection (PIP)

PIP is designed to make medical care more accessible and affordable by covering healthcare costs related to injuries sustained in a vehicle accident. It is important to note that PIP policies have minimum coverage amounts and per-person maximum coverage limits, which vary by state. In some states, PIP is mandatory, while in others, it is optional or not available.

In addition to medical expenses, PIP can also provide payments for lost income, childcare, and funeral expenses related to the accident. This comprehensive coverage ensures that individuals affected by an automobile accident can receive the financial support they need during a challenging time.

The benefits of PIP are significant, especially in states with no-fault insurance laws. In these states, all drivers are required to purchase PIP coverage as part of their auto policies, ensuring that they can access prompt payment for injury-related expenses without having to wait for liability lawsuits to be resolved.

Overall, PIP plays a vital role in providing financial protection and peace of mind for individuals and businesses alike, making it an essential consideration when purchasing business auto insurance.

Uninsured motorist coverage

There are two main types of uninsured motorist coverage:

Uninsured Motorist Bodily Injury (UM or UMBI)

UMBI covers medical or hospital bills for people who are injured in an accident caused by a driver without insurance. It also covers medical expenses and related costs if you or your passengers are victims of a hit-and-run accident. UMBI will pay for medical bills, lost wages, and pain and suffering for you and each other person in your vehicle.

Uninsured Motorist Property Damage (UMPD)

UMPD protects you from losses when an uninsured motorist causes damage to your vehicle. This coverage can sometimes protect you from damages caused by hit-and-run incidents. Depending on the state, UMPD insurance may cover your personal property as well as the vehicle involved in the accident. However, UMPD insurance coverage may not be available in all states.

The amount of uninsured motorist coverage available varies from state to state, with some jurisdictions making it mandatory and others limiting the coverage options. In some states, only UMBI is mandated, while UMPD is optional. It's important to check the specific requirements and options for your state.

Frequently asked questions