Commercial auto insurance policies are designed to protect your business’ vehicles in case of damage or an accident, but unfortunately, these policies don’t cover everything. It is important to understand what may be excluded under your commercial auto insurance policy and how to avoid a commercial car insurance claim being denied.
Personal Vehicles vs Personal Use
As a rule, basic commercial auto insurance policies do not cover personal vehicles or leased vehicles. If your employee uses their personal vehicle to work, for example, they will not be automatically covered under your company’s commercial auto insurance policy—nor may they be covered under their personal auto insurance policy, leaving both you and the employee at risk for liability issues.
There is additional coverage you may add to a commercial auto insurance policy to cover personal and leased vehicles, however. Hired or Non-Owned Vehicles is coverage specifically used to cover vehicles used but not owned by the business, such as employee vehicles and leased vehicles.
Keep in mind that personal use is calculated differently. While personal vehicles may not be covered under a standard commercial auto insurance policy, personal use of a commercial vehicle can be covered. If one of your employees uses a work vehicle to run a personal errand or if your employees have company cars they take home with them, accidents should be covered under your business’ commercial auto insurance policy. Be sure to speak with your insurance agent about your policy’s limits when it comes to personal use.
Common Exclusions of Use
There are other exclusions that will not be covered under commercial auto insurance depending on the circumstances of use. For example, accidents may not be covered if your employee causes a wreck while under the influence of drugs or alcohol. It may also not cover damages incurred while a hired driver is committing an illegal activity or intentional damage.
Does Commercial Auto Insurance Cover Theft and Vandalism?
As long as you have a full coverage policy, your commercial auto insurance should cover theft and vandalism. These are both covered under comprehensive coverage, which also includes coverage for damages to the vehicle caused by fire, wind, hail, lightning, falling objects and more.
This may also extend to theft and vandalism caused by employees. If a disgruntled ex-employee decides not to return a work vehicle, for example, you should be covered.
Also Read: When Do I Need Commercial Auto Insurance
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