You carry auto insurance because legally you need it to drive, or your loan requires it, but you not sure what’s covered or if you have enough coverage.  Hopefully, after reading this article you will have a better understanding.

Personal automobile policies and business automobile policies general have many of the same coverages.  There are a few differences, which I will discuss.

The first coverage shown on your declaration page is usually your Automobile Liability  coverage.   Liability coverage covers a third party for damages you may have caused either bodily injury or property damage.    On a personal auto policy this limit is generally stated as one limit for bodily injury and another for property damage.   On a business auto policy this limit is usually one total limit for both

We often get asked how high of a liability limit should you have?   There’s not an exact answer to this question.   You want to have a Liability limit high enough to protect your assets.   If you own a home, business, etc., you generally have more assets than someone who does not.  Therefore, you would want to have a higher liability limit.  If you are concerned that you may not have enough coverage please call our office  to discuss it.  We can provide you with some guidance and also quote higher limits so you can compare.

Medical Payments  coverage is a “no fault” type of coverage.   You don’t have to be at fault in a accident for this coverage to respond.  Medical payments coverage generally has a limit of $1,000, $5,000 or $10,000.  It is to cover minor medical bills that you, someone in your vehicle, or someone in the other vehicle incur as the result of an accident.   It will also cover you if you are injured if you are in someone else’s vehicle, or as a pedestrian and are hit by a vehicle.

Uninsured Motorist’s coverage covers you or anyone in your vehicle or  even you as a pedestrian, if you are hit and injured by someone who doesn’t have insurance, or someone who doesn’t have enough insurance..   The key here is that your insurance company has to be able to confirm that person does not have insurance.   So if you are involved in a hit and run accident uninsured motorist coverage will not respond.    The second part of this coverage is for the damage to your vehicle.   If you have collision coverage it will waive your deductible.  If you don’t have collision coverage it will pay up to $3500 for damage to your vehicle.

There are two coverages that cover damage to your vehicle .   They are comprehensive (other than collision) and collision.   Both of these coverages always have a deductible.   How high the deductible is, is up to you.   The most common deductlbles are $250 and $500.   This is the part that you have to pay out of pocket.   Collision coverage pays for your vehicle to be repaired or replaced should you hit someone or something.    Comprehensive-is for things other than a collision.  It covers fire, theft, vandalism, glass breakage, earthquake, flood or if you hit an animal.   Comprehensive coverage on an automobile policy is the broadest coverage there is.  The things that are basically excluded are normal wear and tear, damage by vermin, war and nuclear.   That’s about it!  

A few other coverages you may have on your auto policy are towing,  or road side assistance and rental reimbursement.   Most companies now offer full roadside assistance coverage which is quite cost effective.  So rather than just having towing coverage that would respond if you have an accident and your car needs to be towed, it will respond for any towing situation, or if you car needs to be jumped, etc.   Rental reimbursement covers your should need a rental car while your car is being repaired due to a covered claim.    Although these coverages have been offered on personal auto policies for quite some time, many companies now offer them on business auto policies too.

There are two more coverages that are only available on business auto policices.  They are non-owned auto  and hired auto coverage.   Non-owned auto covers  a business for liability when their employees drive their own personal vehicle in the course of employment and hired auto liability coverage provides coverage for a business should they rent a vehicle.   Hired auto physical damage coverage is also available to cover damage to a rented vehicle should the need arise

Now that I’ve explained the basic coverages of your auto policy, you may want to know if you use your personal vehicle in certain business situations  will your personal auto policy provide coverage.   Most insurance carriers allow for certain classes of businesses to still be insured on a personal auto policy.  These are professions like a salesperson, or real estate agent.   But if you are a contractor who has a truck and is carrying equipment you should have a business auto policy. 

One profession that’s been in the news a lot lately is Uber drivers.   You may decide that you want to earn some extra cash by driving for Uber.  However this is not generally covered under a personal auto policy.  You will find an exclusion in every personal auto policy for livery (getting paid to transport passengers).  However, we do have one carrier, Mercury Insurance Company, that will, at a cost, add an endorsement to your policy to provide coverage should you want to drive for Uber, or similar company.   If  you would like more information please call our office.

If after reading this article you want to review your policy or have additional questions please give Insurance Agent2000 a call at (925) 429-8811.  We are glad to help make sure your Concord automobile policy fits your needs.
Posted 4:04 PM

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