Demystifying Commercial Auto Symbols

02
October 2018
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You’ve never had more buying power than you do today. With the touch of a fingertip to a screen you can uncover secrets, get answers, and dig for information faster and better than ever before. And if you’re shopping for commercial auto insurance, understanding coverage gives you even more power to make a buying decision.

Because you can’t compare rates without also comparing coverage.

And the easiest way to compare coverage is to understand auto symbols.

Decoding Commercial Auto Symbols

What is an auto symbol?

An auto symbol is a code that indicates what - or who - is protected when operating your business vehicle.

The symbols found on a standard business auto policy are numbered 1 - 9 and 19. Here’s what they mean.

Symbol 1: Broad Coverage for Your Autos

Symbol 1 indicates the broadest coverage for your commercial vehicle. Symbol 1 is “any auto” coverage. That means any auto your business owns or uses for business purposes has liability coverage in place.

Let’s say that you own a bakery: The Sweet Shoppe. The Sweet Shoppe is the registered owner of a delivery van and a hybrid-sedan that you use for business purposes. Your commercial auto policy shows a symbol 1 (any auto) for liability coverage.

One day, you accidentally run through a stop sign in your hybrid on your way to pick up a batch of pink bakery boxes from a supplier. You have a minor collision with another car in the intersection.

The other driver suffers an injury and sues The Sweet Shoppe for bodily injury.

Are you covered?

The symbol 1 indicates that you are. It signals that have coverage for any auto, including:

  • Autos you own
  • Autos you rent, lease, borrow, or hire
  • Autos you don’t own

But what if you had sent your employee to pick up those pink boxes?

Let’s say you sent your assistant on that errand, instead. She fails to see a car in her blindspot and collides with another vehicle on her way to the restaurant supply shop while driving her own auto.

The other driver sues your business. Are you covered?

Once again, the broad coverage indicated by a symbol 1 assures you are. It offers liability coverage against claims and lawsuits for third-party bodily injury or property damage for autos used for your business purposes, even if your business doesn’t own them.

Your assistant was on the road for a business purpose, so her accident could be covered by your commercial auto policy.

Symbols 2 - 6: Coverage for Autos You Own

The next few auto insurance symbols – 2, 3, and 4 – designate owned autos and apply to all of the vehicles you own. These symbols indicate coverage for owned autos only.

  • Symbol 2: covers any auto you own, personal or commercial.
  • Symbol 3: covers only private passenger autos (no commercial) you own.
  • Symbol 4: covers all commercial autos (not personal) you own.

Let’s say you own a photography business. You borrow a friend’s SUV to transport your equipment to a wedding. Your friend’s SUV has a really cool entertainment/ navigation system with voice command and stunning 3D graphics. It’s so cool that you accidentally rear end a wedding guest while looking at the high-resolution screen instead of the road where the event is taking place.

Ouch.

Your auto policy shows a symbol 2 (owned autos only). Are you covered?

Unfortunately, it’s not just your neck that’s hurting after this accident. Your cash-flow is about to hurt, too. If you’re only covered for autos you own, your policy isn’t going to be any use to you when you’re driving a borrowed automobile.

If you had been driving your own car, you’d only be paying the deductible for this accident. But in a borrowed car, you could be facing a much larger bill.

Symbols 2, 3, and 4 automatically provide coverage for any new autos your business acquires during your policy period. If you add a new vehicle to your fleet, it’s automatically covered.

Symbols 5 and 6 apply to specific coverages for autos you own.

  • Symbol 5: no-fault coverage for vehicles you own.
  • Symbol 6: uninsured motorist coverage for vehicles you own.

Symbol 7: Limited Commercial Coverage

One symbol that is commonly found in commercial coverage is symbol 7. This indicates a very narrow range of limited coverage.

Symbol 7 coverage means only the vehicles scheduled on the policy are covered. These autos specifically described in the policy declarations.

If you purchase a new business vehicle and fail to report it within your policy’s reporting period - usually 30 days - you could be left uninsured.

With symbol 7 coverage, don’t expect to be covered if

  • You borrow, hire, or lease a vehicle
  • Your employee is driving their own vehicle to run errands or make deliveries

Symbol 8 and 9: Hired and Non-owned Auto Coverage

You can increase the strength of symbol 7 protection by adding symbol 8 protection to it: hired auto coverage.

Hired auto coverage means you’re covered for any autos hired, rented, leased, or borrowed for your business purposes.

This isn’t exactly broad coverage. It won’t cover vehicles you borrow from your employees or members of your household.

But you can add one more layer of protection with symbol 9: coverage for non-owned autos used for your business. These are the vehicles that your business may use but doesn’t own and hasn’t rented. In other words, the borrowed vehicles.

Driving your wife’s personal car for business purposes? That’s a borrowed vehicle.

Asking your brother to lend you his truck so you can transport some equipment to a trade show? Symbol 9’s non-owned coverage has you protected.

Symbol 19: Mobile Equipment Coverage

This symbol is rarely needed but worth mentioning. Symbol 19 provides coverage for mobile equipment that is considered an auto when driven on a public road. This could be a bulldozer or forklift, for example.

Symbol 19 is typically chosen when you purchase a new bulldozer during the policy period and no other symbol appropriately covers it. Let’s say you have symbol 8 coverage for hired autos.

Symbol 8 doesn’t apply to owned autos, so symbol 19 could be just the right amount of coverage for this piece of mobile equipment.

It’s Not Just About Rates

Getting a quote for commercial auto coverage is about more than just the “lowest rate.” The lowest rate may be for the narrowest coverage.

When you’re shopping for commercial auto coverage, you can’t compare rates without comparing coverage, too.

Know your risks.

Understand what symbols indicate the coverage you need.

Then make a choice about commercial auto coverage.

A rock bottom rate sounds great – until you realize that it only affords symbol 7 coverage for your commercial autos. Getting quoted a low rate for symbol 7 coverage isn’t very helpful if you need the broad coverage afforded by symbol 1.

Now when you shop for commercial auto coverage, you can ask: what symbol is that?

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