What’s the Difference between Personal and Contractor Commercial Auto?

The most important difference between a commercial auto policy and a personal auto policy is the available limits. The personal auto policy limit typically maxes out at $500,000 while the commercial policy will offer limits up to $2 million. It’s not about your truck or van, it’s about your liability. You can easily determine your property risk by adding up the value of your vehicles but your liability risk will always remain an unknown. If you or an employee are in an at-fault accident in a company vehicle, the minute that other driver finds out that you have a business, their neck will hurt, their back will hurt, and the letters from their attorney will arrive by certified mail.

Why can’t I just use my Personal Auto Policy?

Good question. Most business vehicle use is excluded from a Personal Auto policy. A Personal Auto policy is written and rated differently than a Contractor Commercial Auto policy. As a Contractor, certain job owners may require you to obtain Contractor Commercial Auto policy for reasons such as:

1. Commercial jobs normally require increased limits of $1,000,000 Combined Single Limits.
2. General Liability policies will not cover a vehicle related claim on a jobsite.
3. Additional coverages such as Additional Insured, Waiver of Subrogation, Hired & Non Owned Auto are available on a commercial auto policy.
4. Personal Auto policies typically don’t cover vehicles used for Commercial purposes.

How am I Covered?

• Bodily Injury Coverage– provides coverage for bodily injury or death resulting from an at-fault accident and in most cases, provide yout legal defense as well.

*This coverage is triggered and responds if you are considered liable for an injury or death to a 3^rd person.

• For example, you’re driving home from a jobsite and your Bobcat loader falls off the back of the trailer and either hurts someone badly or kills them.

• Combined Single Limit (CSL)– a standard liability policy offers separate limits that apply to bodily injury claims or property damage. A combined single limits policy has the same dollar amount of coverage per covered occurrence whether bodily injury or property damage, one person or multiple individuals.

*This coverage is exactly what the name implies; it combined into one single limit.

• For example, if you have an accident and your policy has the standard split limits of 100/300/50, you might not be fully covered. We’ll assume the accident caused $225,000 in damages and injury. One would think that the $300,000 total accident limit would cover it without issue, however, it does falls short. If two of the injured passengers incurred $165,000 of medical bills (one at $15,000, and the other at $150,000), coupled with $60,000 in physical damages, you would still be liable for $60,000 in payments because the policies sub-limits of $100,000 medical and $50,000 for property were surpassed.

• Med Pay– provides coverage for the medical bills of the insured driver and passengers in your vehicle incurred as a result of a covered accident regardless of who’s at fault.

*This coverage is also pretty self-explanatory.  It will assist with “reasonable” medical payments in an eligible loss.

• For example, you are on your way to a job-site when suddenly an oncoming car drifts into your lane, and you swerve to avoid him causing you to hit a telephone pole causing your employee to crack open his forehead.

• Comprehensive Physical Damage – provides coverage for damage caused by theft, vandalism, flood, fire and other covered perils.

*This one can also be known as coverage for losses from acts of God (other than collision)

• For example, a tree falls down in a windstorm and goes through your windshield.

• Collision –provides coverage for damage to your vehicle when it hits or is hit by another vehicle or object.

*This one triggers when you are in an accident and damage your vehicle.

• For example, you’re in an accident and total your vehicle. Let’s hope you have collision!

What about my Trucks?

The commercial auto policy will accommodate all of your vehicles. Whether your company owns vans, trucks, trailers, or passenger vehicles, each vehicle can be added to the policy and there is with some companies, no limit on the amount of vehicles you need to insure. You may also choose to insure your vehicles on a “stated value” basis rather than “actual cash value”. You elect the deductible that you feel comfortable with and the insurance company takes care of the rest. You can also include coverage for additional equipment such as lift gates and hoists.

What about Me and my Employees?

Since the commercial auto policy provides much higher limits than the personal auto policy, you may elect to purchase Uninsured Motorist limits up to the same limits as your liability limits such as $1million or $2 million dollars. You may also elect higher limits on your Medical Payments coverage so you will know your employees and other passengers in your vehicles are sufficiently protected.

What if I Rent a Work Vehicle?

No problem! Your commercial auto policy can be endorsed to include “Hired and Non-Owned “ vehicle coverage that will extend your liability and physical damage coverage on to a vehicle you rent or borrow. You can also extend your liability coverage to an employee’s vehicle if they are using their vehicle while on the job.

What if I break down?

Even the best-kept vehicles can break down, have a flat tire, or run out of gas from time to time. By selecting the optional roadside service endorsement, your insurance carrier will reimburse you up to the limit you select for roadside expenses. Many of our companies will even dispatch the tow truck and pay the towing service directly so you don’t have to put your cash out at the time of service.

Can’t I use my family car policy?

Typically, your personal auto insurance company will not allow you to have your commercial vehicles on your personal policy. If you read your personal auto policy, you will discover exclusion language for commercial use of your vehicle. Your personal auto policy is not sufficient to protect you, your company, or your employees. Don’t take the chance since you may find that your contractor commercial auto insurance policy may actually cost less than your personal auto policy. Fairbanks Insurance Brokers is going to take the time and effort to make certain that we provide the best coverage at an affordable price!

What are my Payment Options?

Fairbanks Insurance Brokers has a variety of different payment options to choose from when it comes to purchasing your commercial auto policy.

1. Full Payment Option– Pay the policy premium in full in one lump sum. This option is highly recommended to avoid missing a monthly payment and possible late fees or cancellation.
2. Direct Bill Option – The carrier will send you a monthly statement until the policy is paid in full. This option normally requires a small down payment and then the balance is divided up over an 8-10 month billing period.
3. Financing Option – Fairbanks Insurance Brokers willset up monthly payments through a third-party finance company. This is our most popular option which requires a small deposit and flexible monthly payments with NO credit score required and instant approval.

Why choose Fairbanks Insurance Brokers?

Fairbanks Insurance Brokers has extensive experience when it comes to providing Residential and Commercial construction risks with affordable A-Rated Commercial Auto coverage. We know exactly what you’ll need to fulfill those complex insurance demands required to win that project your bidding. $1 Million CSL? No problem. Hired and Non Owned Auto? No problem. Additional Insured, Waiver of Subrogation and Primary Wording endorsements? That’s right. No problem! Send it our way and we’ll get you set up. Cheap!