Comprehensive versus collision
Collision pays when a covered vehicle hits another vehicle or object or overturns. Comprehensive, sometimes called other-than-collision, pays for theft, vandalism, fire, hail, flood and hitting an animal. Most lenders and lessors require both.
How the value is set
Many policies pay actual cash value, which is replacement cost minus depreciation. Some insurers offer stated amount coverage for upfitted vans or specialty bodies; the policy then pays the lesser of the stated amount and the actual cash value, so read the wording. Shelving, ladder racks and lift gates may need to be listed to be covered as part of the vehicle.
Tools and equipment inside the vehicle
A business auto policy usually does not cover tools or inventory stored in a van. Those are typically insured under an inland marine or contractor's equipment policy, or on a business owners policy. Ask about this if your tools are worth more than the van.
Choosing deductibles
Physical damage deductibles are usually set separately for comprehensive and collision, and they can differ by vehicle. A higher deductible lowers the premium but means the business pays more of each repair. Compare the savings over a year with how many small claims you would actually expect to pay yourself.
Leased and financed vehicles
Lenders and lessors normally require physical damage coverage and want to be named as loss payee, and lessors often as additional insured. On a leased vehicle, ask about gap coverage, which can pay the difference between the actual cash value and the remaining lease balance after a total loss. Some leases require it.
Rental reimbursement and downtime
Rental reimbursement pays toward a substitute vehicle while a covered vehicle is being repaired after a covered loss, up to a daily and total limit. It does not pay lost income. For businesses that depend on one or two vans, ask how long repairs to upfitted vehicles usually take in your area and set the limit to match.
Information that speeds up a quote
- VIN, year, make and model of each vehicle
- Cost or value of upfits such as shelving, racks or lift gates
- Lienholder or lessor names and addresses
- Preferred deductibles for comprehensive and collision
- Where vehicles are parked overnight
Frequently asked questions
Should I drop physical damage on older vehicles?
Some businesses do once a vehicle's value falls close to the deductible plus a year of premium. Keep liability either way.
Can deductibles differ by vehicle?
Usually yes. You can choose a higher deductible on older pickups and a lower one on a new upfitted van.
Does physical damage cover a vehicle I rent for a job?
Not automatically. Physical damage on rented vehicles needs hired auto physical damage coverage, which some insurers add by endorsement.