Are you a business owner or business representative shopping for Business Auto Insurance or Cheap Car Insurance in California, regardless if you live in Los Angeles CA, or Orange County California? If so, understanding the basic requirements and history of your commercial auto insurance policy will not only save you money on your insurance policy.
More importantly, will help you understand what type of coverage to have and what underwriting guidelines follow your business coverage. Nearly every business operates at least one car to conduct deliveries, transport employees, or perform essential task away from the office.
Since your commercial policy is similar to your personal auto insurance coverage, it is easy to understand, and can also be purchases as part of a commercial package policy.
Business Auto Insurance vs. Car Insurance
The Business Auto Policy is a general purpose insurance policy that is used to write automobile coverage for most types of vehicle risks.
It is commonly used to insure company cars, vans, trucks and other vehicles utilized in business use, including those that own and supply company cars to employees.
This is in addition to those that use vans and trucks to haul their own goods, including those that transport passengers, and lastly, those that lease vehicles to others.
Exposure and Risks
Businesses may have automobile exposures arising out of owned, leased, rented, or borrowed vehicles.
At one point in time, the basic standard automobile policy was used to insure most of these risks, but the basic vehicle policy only provided coverage for autos which were specifically scheduled on the policy.
However, coverage for hired cars and non owned autos could be added by an endorsement, which in the coverage industry means, any policy changes.
At a later date, the coverage’s of comprehensive automobile liability coverage was introduced, and it became very popular among entities having large and continually changing fleets.
General Insurance – Benefits
Having commercial coverage provides many financial benefits for business owners.
With these policies, companies become responsible for covering the costs to repair damaged vehicles. Insurers also pay for claims made against the policy owners by third parties up to the plans’ coverage limits.
Companies that need to go to court have their legal fees paid for by these policies as well.
Companies can customize their commercial policies with several types of auto coverage’s. Some of the available options include liability, personal injury protection, uninsured and under-insured motorists, collision, comprehensive and medical payments coverage.
Businesses can also add emergency road service, loss of earnings coverage, death, dismemberment and loss of sight to their plans.
Companies take into consideration several factors about the applicants before determining premium amounts. Some of these factors include the business’ location, number of drivers and their driving records and coverage amounts.
Depending on the auto insurers’ assessments of these factors, premiums can range from $200 to $2,000 annually.
Companies can take steps to lower their premiums by raising their deductibles and comparing commercial auto quotes from different business car insurers.
Using cars insured by personal auto plans for business purposes leaves companies vulnerable to being sued by injured parties. Personal plans only pay for damages and injuries resulting from accidents, but they don’t cover lawsuits against businesses.
Also, claims can be denied by insurers if policy owners are not truthful about how much they use their vehicles and for what purposes.
For example, companies will not pay for damages if commercial vehicles are involved in accidents when drivers were using them for personal travel or errands.
Who is an Insured on Business Auto Insurance?
Great question and can vary in definition from a personal policy. So, who exactly is an insured you ask. Well, there are actually several categories of insureds unlike what you would find on your policy.
The named insured on your coverage policy is an insured for any covered vehicle listed on your declaration page.
It makes no baring if the auto is owned or non owned, private passenger type or other than private passenger type, as long as that vehicle is designated as a covered vehicle under the BAP or Business Auto Policy, the name insured is an insured for liability coverage purposes.
If the auto is not so designated, the named insured is not an insured even under his or her own BAP.
Definitions of the Policy
This term leads off into different areas by definition. The wording itself does not explain what an accident truly is, rather it just states that an accident includes continuous or repeated exposure to the same conditions.
This obviously results in bodily injury or property damage. With that said, an accident should be viewed from the insured’s viewpoint and no that of the carrier.
Two sections of the definition of “auto” is described. The first part describes a land motor vehicle, trailer, or semitrailer designed for travel on public roads. The definition goes on to further include any land vehicle that is required to have financial responsibility or is subject to a compulsory law.
So, basically if required by law, any vehicle used on public highways and roads, would fall under this definition umbrella.
The reference to vehicles subject to compulsory or financial responsibility laws is meant to illustrate that these types of vehicles are not to be covered for over the road exposures listed by the CGL form. Rather, it would fall under policy.
The definition of “auto” is clearly defined to not include any use of mobile equipment.
Liability for the ownership or use of the mobile equipment is processed through the general liability portion of coverage found on your policy form.
The BAP, or policy, draws a clear distinction between an auto and mobile equipment. However, on some accounts the line of distinction can be blurred.
Make sure to review all underwriting guidelines to ensure your coverage is including all your assets with no gaps in coverage.
Limit of Coverage
Under this type of policy, regardless of the number of covered vehicles, insureds, premiums paid, claims made or vehicles involved in an accident, the most a carrier will pay out for bodily injury is the limit showing on your declaration page.
This page is usually the first page on your packet.
The limit for each insured injured in any one accident is the total number.
In other words, the company will pay for your medical expenses of each injured person up to the limit shown on your declaration form.
Example of Coverage
If there are five people in one of your covered vehicle and they are injured in the same accident, the med pay limit would be five thousand dollars. Each injured insured would have up to five thousand dollars of his or her medical expenses or funeral expenses paid.
The limit of coverage clause also declares that no one is entitled to receive duplicated payments for the same elements of loss under the med pay for and any liability cover for.
This also includes uninsured motorist coverage or under-insured motorists coverage.
As an example, if an injured person received payment for the injuries suffered in an auto accident from the liability coverage section of the BAP.
If this should occur, that person would not be entitled to get paid for the same injuries under their own medical payments coverage.
The carrier wants to make sure that injured person is not paid twice or more, for the same injury arising from the same accident. Makes sense, coverage is only to be used until the loss or incident is closed and covered.
The language you will find on your policy, will correspond with that found in the limit of coverage clause in the liability coverage section of the BAP in order to strengthen the cause against duplicate payments.
Changes in Conditions
Under CA 99, it offers two changes to the policy conditions section of the BAP.
The first change is that the transfer of rights of recovery condition do not apply to your medical pay coverage. This makes sense in that medical pay is not based on liability.
A transfer of rights of recovery suggests that one party has a liability claim against another party.
However, this concept is not relevant to medical pay cover since the transfer of rights clause can be removed without affecting coverage.
The second change notes that the other clause in the BAP speaks on is other collectible coverage. This coverage only applies to other collectible auto medical payments.
Other definitions found within your BAP are also applicable to endorsement.
These additional definitions has a section of the endorsement that adds two or more that are closely associated with medical payments coverage than compared with the coverage options found on a business auto policy.
Family Member Definition
The term family member is defined as a person related to the primary insured wither by blood, marriage, or adoption who is a resident of the name insured’s household.
This can also include a ward or foster child. As noted previously, if the primary insured is a corporation or a partnership, the term family member is not really relevant.
However, if the named insured is an individual, then coverage would exert to other family members. This definition needs to be defined so as to identify the scope of coverage.
The other defined term is occupying. This term means in, upon, getting in, on, out or off. This is relevant in that who is an insured under this form includes the name insured and family members occupying any vehicle, and anyone else occupying a covered vehicle.
Cover All Bases
The carrier is trying to cover all the bases here by using just about any word that may describe and include occupying. Even though the word occupying may be subject to varying judicial interpretations, the basic idea behind this definition is to link the injured person with an auto ins some way.
Medical payments coverage also includes payments and it is a warranted idea for a company to try to make the payments based on a connection to a vehicle.
As an example, if you park your covered vehicle in a customer’s lot and walk into the building, get hurt ins some accident, it is not reasonable to expect medical payments policy to apply to that situation.
There could be concern if an insured had parked his or her vehicle and walked away from it, and then get struck by another vehicle.
In this situation, the carrier will deny med pay coverage because the insured is not occupying the vehicle. However, the primary insured and family members are insureds if struck by an auto wile pedestrians, so this concern does not apply.
However, as for anyone else, the situation is not as clear and cut.
It is always helpful to review your current business auto policy to make sure coverage’s reflect your current operation and needs.
You may have purchased another vehicle for you business since your last policy term and need to look at getting fleet insurance, or you are just looking for the company who can grow with you, and who specializes in your specific market niche.
That is the ultimate goal because not only do these niche companies understand your specific industry and insurance needs, but can offer very competitive rates others can’t compete with.
This all adds up to huge savings on your policy premium. These questions are important to examine before making any auto insurance purchase for your business.
If this is your first experience in buying Cheap Auto Insurance California, regardless if you live in Ontario CA, or Fontana CA, we can help.
We have 30 Years experience in the commercial auto field and can compare and find you the cheapest auto insurance policy for both personal and business.
Contact Target Up Insurance at 800-962-0085, we understand commercial auto insurance Orange CA and business coverage, and have a dedicated department specializing in both lines.
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