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  • Difference Between Commercial & Personal Auto Insurance
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    Specialized Coverages

    A good commercial auto policy will protect you, your business, and your employees—and the vehicles you own, lease, rent, or borrow—whether they’re on the road or idle. In addition to major coverages like collision and liability, many commercial policies offer specialized coverages, which may or may not be included at no additional cost.

    These include:

    • Coverage for hired auto physical damage. Up to a maximum limit, vehicles you hire, rent, or borrow for your business can be covered for physical damage. This type of coverage typically excludes vehicles that belong to your employees or partners. One frequent precondition for this coverage is that the damaged vehicle has preexisting liability insurance, and that your business-owned vehicles carry coverage for physical damage.
    • Lease or loan gap coverage. What if a car that your business is leasing or making payments on is totaled—and the book value of the vehicle is less than what you need to pay back to the bank or the car dealer? This type of coverage will make up the difference. For example, if you’ve been making payments on a car that’s destroyed in an accident, this insurance would pay off for your remaining loan balance.
    • Electronic equipment coverage. This insures permanently installed electronic equipment, such as a GPS or DVD player, that is stolen or damaged in an accident.
    • Rental reimbursement. This helps to cover the costs associated with temporarily using a rented vehicle to replace a damaged one. Typically, rental reimbursement is available when your commercial auto insurance includes collision coverage.

    As with all insurance policies, you should know your commercial auto policy well. Be sure to review the language of the policy to understand what your coverages are, and how they might apply to every situation in which a vehicle is used for your company.

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    Game Plan

    • Insure U’s Introduction to Commercial Auto Insurance provides a good overview of commercial auto insurance, particularly in terms of what impacts the cost of policies.
    • Are you and your employees maintaining good driving records? Some insurers offer safe driving rewards, including “fender-bender forgiveness” policies that promise not to raise your rates for any claims of less than $1,000.
    • Ask your insurance professional how you might qualify for a multiple-policy discount from your insurance carrier.