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COMMERCIAL AUTOMOBILE COVERAGES
Liability Coverage
The liability coverage of the commercial auto policy provides protection against legal liability arising out
of the ownership, maintenance, or use of any insured automobile. The insuring agreement agrees to pay
damages for bodily injury or property damage for which the insured is legally responsible because of an
automobile accident resulting from the ownership, maintenance, or use of a covered auto. The insuring
agreement also states that in addition to the payment of damages for which the insured is legally liable
for, the insurer also agrees to defend the insured for all legal defense cost. The defense cost is in addition
to the policy limits.
Medical Payments Coverage
The insuring agreement states that the insurer will pay all reasonable and necessary medical and
funeral expenses incurred by an insured because of bodily injury caused by an accident. The
insured is the named insured, the insured's employees and guests, and any other person occupying a
covered auto. These payments are made without regard to fault.
Uninsured/Underinsured Motorist Coverage
Uninsured Motorist
This insuring agreement pays for bodily injury to an insured who is injured by an uninsured
motorist, a hit-and-run driver, or a driver whose insurer becomes insolvent. These benefits
are paid under the named insured's policy.
Underinsured Motorist
This coverage is added to supplement the Uninsured Motorist Coverage, the coverage
applies only when the other driver has liability limits at the time of an accident, but the
liability limits carried may be insufficient to pay for damages for which the driver is
responsible. This is when the insured's underinsured motorists coverage would apply and
payment for the difference could be made. The two coverages are mutually exclusive and do
not overlap or duplicate each other.
Any Automobile
Coverage is provided for any auto, including autos owned by the insured, autos the named insured
hires or borrows from others, and other non-owned autos used in the insured's business.
Owned Auto
Coverage is provided for all autos owned by the named insured. The owned auto symbol is used for
liability insurance only.
Non-Owned Autos
Coverage is provided only for autos not owned, leased, hired, or borrowed by the named insured.
Coverage includes autos owned by the insured's employees or members of their households, but
only while used in the named insured's business or personal affairs.
Hired Auto
Coverage is provided only for autos leased, hired, rented or borrowed for use in the named
insured's business.
Physical Damage Coverages
Collision Coverage
This coverage provides protection against loss or damage to a covered auto or a non-owned auto
resulting from the impact with another vehicle or object. Collision losses are paid regardless of
fault.
Comprehensive Coverage
Comprehensive coverage provides protection against loss or damage to a covered auto resulting
from loss other than a collision or upset. This coverage also provides for supplemental payments
for transportation expenses in the event of total theft of a covered auto or a non-owned auto.
Coverage begins forty-eight hours after the theft.
Specified Cause of Loss
This provides coverage against loss from fire, lightning, or explosion; theft; windstorm, hail, or
earthquake; flood; mischief or vandalism; and sinking, burning, collision or derailment of a
conveyance transporting the covered auto.
Endorsements:
Rental Reimbursement
The business auto policy provides a coverage extension if an auto is insured for comprehensive
or specified cause of loss coverage which insures against loss of use of a covered auto only if the auto
is a private passenger type auto and is stolen. The coverage extension pays up to a daily limit of
$10 and a maximum limit of $300. Payments begin forty-eight hours after the theft and ends when
the insured auto is returned or when the insurer has paid the insured for the auto.
However, for broader coverage the insured can pay an additional premium for rental
reimbursement coverage. Rental reimbursement pays the cost of renting a substitute auto for
replacement of any covered auto that has suffered a covered loss. The daily and maximum limit for
this coverage varies among insurers.
Towing and Labor
When this coverage is added, the insurer pays for towing and labor costs each time a covered auto
or non-owned auto is disabled, up to a stated amount.
Personal Injury Protection
Personal Injury Protection (PIP) is an endorsement that adds no-fault benefits. No-Fault means that
in the event of an automobile accident, each party collects from his or her own insurer regardless of
fault. The PIP endorsement is only available in certain states with No-Fault Laws. The
endorsement applies only to bodily injury and not to property damage. (The state of Michigan is
the exception to property damage.) No-Fault Laws vary widely from state to state.
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