No matter what kind of car insurance policy you buy, you need to take a close look at the fine print so that you know exactly what kind of coverage you have. But if you have a commercial auto policy, the fine print is going to be a little different than what you’ll see on a personal policy. Specifically, you’ll see little numbers called symbols.
So, what are they? And, more importantly, how do they affect your coverage?
Commercial auto policies can vary widely, but the symbols show up in the declarations page — on page one of the Business Auto Coverage Form, next to each type of coverage you’ve purchased. These symbols are also referred to as “auto designation symbols” — and, for good reason, because they define the type of vehicle that your commercial policy actually covers. In some cases, the symbols will get even more specific and apply to the particular owner of the vehicle.
Similar to a personal policy, commercial liability coverage will kick in if you or one of your employees is at-fault in an accident. This coverage will pay for both property damage and medical expenses if someone in the other vehicle was injured.
As far as the symbols go, insurance companies use the numbers 1-9 and 19 for liability coverage. The symbol “1” offers the broadest type of coverage — it covers any “auto” that’s used for your business purposes, whether you own it or not. As the numbers get bigger, the coverage gets narrower.
Here’s what you need to know about the others:
– Symbol 2 means you have coverage for any “auto” you own — including trailers they’re towing and any new “autos” you buy after the policy kicks in
– Symbol 3 means that the coverage only applies to private passenger-type “autos”
– Symbol 4 refers to coverage for all other “autos” besides the ones listed in 3 — like vans or big trucks
– Symbol 5 refers to any “auto” that’s housed in a no-fault state (California is NOT a no-fault state, though)
– Symbol 6 covers “autos” that are housed in a state that requires uninsured motorist coverage (California doesn’t)
– Symbol 7 means you’ll only have coverage for “autos” that are specifically listed on the policy. If you go out and buy a new vehicle, you’ll have to add it onto the list in order for it to be covered.
– Symbol 8 means that the coverage only applies to “autos” that you’ve leased, rented, borrowed, or hired from someone other than a member of your household, an employee, or a partner.
– Symbol 19 is the newest, and it applies to mobile equipment — like a bulldozer or a forklift. This symbol isn’t used very often, but if you’re required to get liability insurance for any of your business’ mobile equipment, you’ll need to make sure this symbol is listed in your policy!
Why is “auto” in quotation marks?
Because each insurance company treats the term “auto” differently. You’ll have to check with your specific company to find out what they consider to be an “auto”.
OK, so what about the symbols that are used for physical damage coverage?
There are fewer symbols used on the physical damage portion of your policy, but each one specifies how your vehicles will be covered if they’re damaged in an accident. Insurance companies only use the numbers 1-5 for this type of coverage, and just like the liability symbols, these symbols get more specific as the numbers go up.
Here’s what these commercial auto symbols mean:
– Symbol 1 is the broadest type of coverage because it applies to any “auto” that you own and use for commercial purposes.
– Symbol 2 means you’ll have coverage for private passenger-type “autos” you own and use for commercial purposes
– Symbol 3 covers all other “autos” besides the passenger-types covered by symbol 2
– Symbol 4 only covers “autos” that are specifically listed on your policy. Again, if you buy a new vehicle, you’ll have to add it onto the list if you want it to have coverage.
– Symbol 5 provides coverage for “autos” you’ve leased, rented, borrowed, or hired from someone other than a member of your household, your partner, or one of your employees.
Just like in the liability section, you’ll see that “auto” is in quotation marks, so you’ll need to know how your specific insurance company defines an “auto” before you’ll know if the coverage meets your needs and wants. But unlike the liability section, there is no physical damage symbol that applies to mobile equipment. That’s because the only required coverage for that equipment is liability.
What if you want to add mobile equipment physical damage coverage to your policy — or some other type of coverage? Are you out of luck if there’s no corresponding symbol?
If the symbols you see listed on your policy don’t look like an exact fit for your needs and wants, it is possible to change things. If your insurance company agrees to cover a vehicle or an ownership scenario that’s not included in any existing symbol, they can create a new one for you. If you’re making a change to your commercial liability coverage, the insurance company will likely use the symbol “10”. If you’re making a change to your physical damage coverage, the insurance company will likely use the symbol “7”.
In either event, these changes are called “endorsements”, and they’re added onto the language of your policy. Every endorsement comes with an explanation, but of course, if you don’t understand the fine print, talk to your agent. That’s what they are there for!
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