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Company Car Insurance Cover

What Does Car Insurance Cover?

A single car insurance policy can include several types of coverage. To decide what to buy, it’s important to research the options available, which types of coverage are required and how different forms of coverage work.

Keep in mind that your policy covers you, the licensed members of your household who are listed on the policy, and usually anyone else you give permission to drive the car.

Meeting your state’s car insurance requirements

Almost every state requires you to carry a minimum amount of auto insurance to cover the cost of damage or injuries caused by your car in accidents.

The minimum car insurance requirements vary by state. Here are types of coverage that may be required where you live:

  • Liability insurance
  • Personal injury protection or medical payments
  • Uninsured or underinsured motorist coverage

Liability insurance

Liability insurance pays for damage and injuries you cause others in accidents. All states except New Hampshire require minimum amounts of liability coverage. Bodily injury liability pays the medical expenses of others who are injured; property damage liability pays to repair or replace their cars or other damaged property.

The amount of liability coverage is usually expressed as three numbers, such as 100/300/50. Here’s how to translate that:

  • $100,000 bodily injury per person
  • $300,000 bodily injury per accident
  • $50,000 property damage per accident.

Your car insurance will pay up to the limits on the policy. You’re on the hook for expenses that exceed those limits.

Personal injury protection or medical payments insurance

Liability insurance pays out to other people. For your own medical costs, you might consider personal injury protection (PIP) or medical payments coverage (MedPay), which may be available as part of your car insurance quotes. These pay any medical bills you or your passengers may incur if you’re injured in an accident. They can also pay for funeral costs.

One or the other is required in 16 states, but coverage works a little differently in each state. PIP can also cover lost wages and the cost to replace services normally performed by the injured person. MedPay is usually sold in smaller amounts than PIP.

Uninsured or underinsured motorist coverage

Even though most states require liability insurance there are a lot of uninsured drivers on the road. You could try to sue them if they crash into you, but they might not have the money to pay you. In that case, uninsured motorist (UM) coverage might come in handy. It pays your medical expenses if you’re injured in an accident caused by a driver who is uninsured.

There’s another closely related coverage type: Underinsured motorist (UIM) coverage pays out if the other driver doesn’t have enough liability insurance to pay all your medical expenses. The coverage kicks in once the costs exceed the other driver’s liability limits.

UM or UM/UIM is required in 19 states.

Another type of coverage, uninsured motorist property damage (UMPD), pays to repair or replace your car if an uninsured driver wrecks your vehicle. UMPD isn’t available everywhere.

Collision and comprehensive coverage

While liability insurance pays to fix others’ cars, collision and comprehensive insurance pays to fix your car or reimburse you for its current value if it’s damaged beyond repair. No state requires drivers to carry collision and comprehensive coverage, but your lender will require it if you financed or are leasing a vehicle.

  • Collision insurance pays out if your car crashes into an object or another car or if it flips over.
  • Comprehensive insurance pays out if your car is stolen, or damaged by anything other than car accidents. That includes damage from storms, floods, falling objects, explosions, earthquakes, vandalism or contact with an animal, such as hitting a deer.

Collision and comprehensive are usually sold together and include a deductible, which is how much of the insurance claim you’ll have to pay before your insurance pays. The higher the deductible you choose, the lower the premium for collision and comprehensive coverage.

Gap insurance

If you’re leasing a car, the leasing company might also require you to carry “gap” insurance. If your leased car is damaged beyond repair, gap insurance pays the difference between the claim check for the car’s value and the amount you owe on the lease. Usually the car dealer will provide gap insurance, and the cost will be included as part of the lease.

You can also buy gap coverage if you have a car loan. This protects you in case your car is totaled and you owe more on the loan than the insurance company pays out. You’ll need to talk to a car insurance agent or company representative to buy a gap insurance policy.

Car insurance extras

You can choose from a variety of extra perks, which usually don’t cost much to add to a policy, but can come in handy in an emergency. You’ll need to buy collision and comprehensive to be eligible to purchase most extras, such as:

  • Rental reimbursement, which pays for a rental car if your car is in the shop following a covered collision or comprehensive claim.
  • Roadside assistance or towing insurance, which provides help if you need a battery jump, flat tire changed or tow to a repair shop after a mechanical breakdown.
  • Full glass coverage, which pays to repair or replace chipped or broken window glass, without a deductible.

Comparing car insurance quotes for coverage

Once you understand the types of coverage available, decide the kinds and levels of insurance protection you need. NerdWallet’s car insurance comparison tool helps you choose from a variety of packages.

About the author

Barbara Marquand

Barbara is a personal finance writer at NerdWallet. Her work has been featured by the Associated Press, Forbes, USA Today and others. Read more

Things to Know About Car Insurance and Rental Cars Before Starting Your Road Trip

Before starting your road trip, DISB offers some things to remember about car insurance and rental cars before for your summer road trip.

Before Leaving on Vacation

Make sure your insurance identification card is in the car. Double-check that phone numbers for your insurance company and agent are listed on the identification card. If not, make note of these numbers to keep with your ID card and bring it with you.

If You’re In an Accident

  • Remain calm.
  • Check for any injuries and administer first aid, if necessary.
  • Contact the proper authorities and inform them of any injuries. Regardless of the circumstances, report the accident to the police.
  • Record the name, address and phone number of the other driver. Always write down the make, model and license plate number of all vehicles involved.
  • Collect the names, addresses and phone numbers of all passengers and witnesses.
  • Take photos of the accident scene, if possible.
  • Do not admit fault.
  • Ask the investigating officer how to obtain a copy of the police report.
  • Notify your insurance agent or company immediately.

What to Expect After the Accident

Rental Cars

If your car was damaged due to another driver’s negligence, the other driver’s insurance company should pay your rental car costs for a reasonable length of repair time. If your car is totaled, many companies will pay for your rental as a courtesy, but they are not required to do so.

If you are filing a claim with your own insurance company, the cost of a rental car will only be covered if you paid a premium to include rental reimbursement coverage in your policy. Most polices have a dollar limit for rental payments, so check your policy.

Things to Consider about Insurance Renting a Car

Car rental companies offer several different insurance options that your existing policy may already cover. They typically offer the following products at the counter:

Collision Damage Waiver is also referred to as a Loss Damage Waiver. If you have comprehensive and collision coverage on your own car, you will likely not need this additional protection. (Comprehensive insurance covers vehicular damages caused by accidents such as fire, theft, wind, hail or a run-in with a deer, vandalism, or theft. Collision insurance covers the cost of repairs or the actual cash value of the vehicle, if damaged in a crash or rollover.) This protection can cost an extra $10-$20 a day.

Liability Insurance covers medical expenses and damages to another person’s property as a result of a car accident caused by the insured’s negligence. If you are adequately insured on your own car, you may consider forgoing this additional liability protection. This supplemental insurance can cost $7-$14 a day.

Personal Accident Insurance offers coverage to the renter and passengers for medical bills resulting from a car crash. If you have adequate health insurance and disability income insurance, or are covered by personal injury protection under your own car insurance, you will likely not need this additional insurance. It usually costs about $1-$5 a day.

Personal Effects Coverage provides for the theft of personal items inside the rental car. If you have a homeowners or renters insurance policy, it generally covers this already. If you frequently travel with expensive jewelry or sports equipment, it may be more cost-effective to purchase a floater under your home or renters insurance policies so the items are fully protected when you travel. Generally, this coverage costs $2-$5 a day.

More Car Rental Insurance Tips:

  • If your current policy doesn’t offer coverage for a rental car, see if an insurance rider can be added for a small fee.
  • If you lack personal auto insurance and your credit card does not provide benefits, it might be wise to purchase the liability insurance and collision damage waiver at the car rental counter.
  • Keep in mind that if it is a longer-term rental (e.g., a week, a month or more), there might be limitations on the coverage your existing auto insurance policy provides. Check with your insurance company or agent for details.
  • If you don’t own a car, you might want to consider purchasing a non-owner auto insurance policy, because it provides benefits in addition to coverage for a rental car.
  • Carefully review your auto insurance policy and check with your credit card issuer about auto insurance benefits. Many credit cards include some level of collision and theft protection. In most cases, these benefits are secondary to your personal auto insurance or the car rental company’s insurance, meaning the credit card company will only pay claims after other insurance coverage has been exhausted.

Uninsured Drivers

If an uninsured driver caused the accident, then your insurance company will pay for damage to your vehicle if you have collision coverage or uninsured motorist property damage. If your damage is repaired under your collision coverage — be aware you will still have to pay a deductible.

Repairs

Even if your claims adjuster recommends a specific body shop, you may choose to have your car repaired at the body shop of your choice. To avoid confusion, notify the claims adjuster about your repair shop before any of the work is done.

If Your Car Is a Total Loss

If the damage is extensive, and the claims adjuster determines the cost to repair your car is greater than the value of your car, the insurance company might choose to declare your car a total loss. When this happens, your insurance company has the option to take the title for your vehicle when it issues payment on your claim.

The insurance company will use the Kelley Blue Book to value the car. The insurance company is required to pay what your vehicle was actually worth at the moment before the crash. The claims adjuster will check to see what a car like yours (same make, model and year) is worth in your general geographic area. It is also a good idea for you to independently research the value of your car before agreeing to a settlement with the insurance company.

Ramifications of Filing a Claim

An accident filed with your insurance company might cause your rates to rise. Premium increases are more likely when the accident is your fault; however, an insurance company might also raise your premiums if you have more than one not-at-fault accident within a policy period. If you have questions about a rate increase following a claim or you are involved in a claim-settlement dispute with your insurer, contact DISB at (202) 727-8000 or [email protected] to file a complaint.

Call DISB at (202) 727-8000 or email us at [email protected] if you have any questions about information on this page.

Business car insurance

Business car insurance explained

By Angela Logan Friday 20 April 2018

Think you need business car insurance? Find out how to get the right cover for your needs.

In this Article

A standard car insurance policy covers your car for so-called social, domestic and personal use, which includes everyday driving such as visiting friends, the shops or a day out.

Many policies also automatically cover your car if you commute to and from a regular place of work. So, if you drive the car to the same office every day, or park in the same station car park, you would be insured. But it’s always advisable to check this with your insurer to make sure you’re not under-insured.

What is business car insurance?

If you drive to several different offices or work sites, if a colleague regularly takes your car to visit clients, or if you drive hundreds of miles a week for business purposes you will need business vehicle insurance.

Car insurance for business use is different from commercial car insurance, which is what you would need if you drove a taxi or a delivery van.

If you have a company vehicle, insurance may not be required as the car should be insured by the company who leases or owns the vehicle. You should check this with your employer.

Higher premiums

Business car insurance is typically more expensive than standard cover because a motorist who drives a vehicle for business as well as pleasure is deemed more risky. They will usually cover more miles, sometimes in heavy traffic and on unfamiliar roads. The chances of a claim therefore increase.

It’s important not to lie in order to bring down the cost of insurance. If fail to disclose the fact that you drive your car for work, you are committing an offence and could invalidate your policy – meaning your insurance would not pay out in the event of a claim.

When getting a business car insurance quote, you will need to answer the usual questions about your age, postcode and the make and model of your car, as well as details about your business, and when and why your drive for work.

Different classes of business car insurance

Business use car insurance comes in several different classes, depending on what level of cover you need. The different classes also vary from insurer to insurer, so always double check the terms and conditions of each policy carefully.

You will probably need class 1 business use if you drive your car to multiple sites or offices, as well as your usual place of work

You will probably need class 1 business use if you drive your car to multiple sites or offices, as well as your usual place of work. Most insurers also include a spouse on this type of policy, but would not insure the car for business use for any other named driver.

The next level of business car insurance generally covers the policy holder, plus a named driver who uses the car to travel between different sites. Someone who travels extensively in the car for work will almost certainly need class 3 business use.

Commercial car insurance

Business car insurance policies are not the same as commercial insurance policies. Commercial car insurance is primarily aimed at motorists who use their car for their job, such as a taxi driver or a delivery driver. The price of a commercial car insurance quote will depend on exactly how and why you use your car professionally. Again, it is important to remember that the definitions of the different classes differ between insurers.

Business car insurance also differs from company car insurance. If you drive a company car, the company car policy should be taken out by the company that owns or leases the vehicle.

Find cheap business car insurance quotes

As this type of insurance is usually more expensive, there’s even more incentive to find cheap business car insurance. The best way to save money is to compare car insurance quotes from a number of different insurers.

It’s easy to do this with MoneySuperMarket: you’ll be asked to declare how you use your car when you’re providing details about yourself and your vehicle. Once you’ve filled in all your details, you can compare quotes from a range of insurers.

Save money on your business car insurance

There are a number of factors that will affect your insurance premium. Your choice of vehicle has a big impact: insurers place cars in one of 50 car insurance groups, and cars in group one tend to be the cheapest to insure.

The security of your vehicle will also have an influence on price, as a secure car is less likely to be stolen. You might be able to reduce your premium if you fit an approved alarm and immobiliser, and keep your car in a locked garage overnight.

Insurers reward careful drivers with lower premiums, so try not to claim for minor issues. By not claiming, you can then build up a no claims discount and potentially cut the cost of cover by as much as 75%.

No one wants to pay over the odds for business car insurance but it is also important to remember that the cheapest policy is not always the best. You might, for example, want to pay a little bit extra for more extensive cover.

You can also increase the voluntary excess to reduce the premium price – but make sure the excess is affordable, in case you need to claim.

Finally, when you review your quotes, you should consider the quality score associated with each policy. We rate each policy on a number of factors that our customers find most important, to highlight how extensive the cover is.

Did you find this helpful? Why not share this article?

Business car insurance

Business car insurance explained

By Angela Logan Friday 20 April 2018

Think you need business car insurance? Find out how to get the right cover for your needs.

In this Article

A standard car insurance policy covers your car for so-called social, domestic and personal use, which includes everyday driving such as visiting friends, the shops or a day out.

Many policies also automatically cover your car if you commute to and from a regular place of work. So, if you drive the car to the same office every day, or park in the same station car park, you would be insured. But it’s always advisable to check this with your insurer to make sure you’re not under-insured.

What is business car insurance?

If you drive to several different offices or work sites, if a colleague regularly takes your car to visit clients, or if you drive hundreds of miles a week for business purposes you will need business vehicle insurance.

Car insurance for business use is different from commercial car insurance, which is what you would need if you drove a taxi or a delivery van.

If you have a company vehicle, insurance may not be required as the car should be insured by the company who leases or owns the vehicle. You should check this with your employer.

Higher premiums

Business car insurance is typically more expensive than standard cover because a motorist who drives a vehicle for business as well as pleasure is deemed more risky. They will usually cover more miles, sometimes in heavy traffic and on unfamiliar roads. The chances of a claim therefore increase.

It’s important not to lie in order to bring down the cost of insurance. If fail to disclose the fact that you drive your car for work, you are committing an offence and could invalidate your policy – meaning your insurance would not pay out in the event of a claim.

When getting a business car insurance quote, you will need to answer the usual questions about your age, postcode and the make and model of your car, as well as details about your business, and when and why your drive for work.

Different classes of business car insurance

Business use car insurance comes in several different classes, depending on what level of cover you need. The different classes also vary from insurer to insurer, so always double check the terms and conditions of each policy carefully.

You will probably need class 1 business use if you drive your car to multiple sites or offices, as well as your usual place of work

You will probably need class 1 business use if you drive your car to multiple sites or offices, as well as your usual place of work. Most insurers also include a spouse on this type of policy, but would not insure the car for business use for any other named driver.

The next level of business car insurance generally covers the policy holder, plus a named driver who uses the car to travel between different sites. Someone who travels extensively in the car for work will almost certainly need class 3 business use.

Commercial car insurance

Business car insurance policies are not the same as commercial insurance policies. Commercial car insurance is primarily aimed at motorists who use their car for their job, such as a taxi driver or a delivery driver. The price of a commercial car insurance quote will depend on exactly how and why you use your car professionally. Again, it is important to remember that the definitions of the different classes differ between insurers.

Business car insurance also differs from company car insurance. If you drive a company car, the company car policy should be taken out by the company that owns or leases the vehicle.

Find cheap business car insurance quotes

As this type of insurance is usually more expensive, there’s even more incentive to find cheap business car insurance. The best way to save money is to compare car insurance quotes from a number of different insurers.

It’s easy to do this with MoneySuperMarket: you’ll be asked to declare how you use your car when you’re providing details about yourself and your vehicle. Once you’ve filled in all your details, you can compare quotes from a range of insurers.

Save money on your business car insurance

There are a number of factors that will affect your insurance premium. Your choice of vehicle has a big impact: insurers place cars in one of 50 car insurance groups, and cars in group one tend to be the cheapest to insure.

The security of your vehicle will also have an influence on price, as a secure car is less likely to be stolen. You might be able to reduce your premium if you fit an approved alarm and immobiliser, and keep your car in a locked garage overnight.

Insurers reward careful drivers with lower premiums, so try not to claim for minor issues. By not claiming, you can then build up a no claims discount and potentially cut the cost of cover by as much as 75%.

No one wants to pay over the odds for business car insurance but it is also important to remember that the cheapest policy is not always the best. You might, for example, want to pay a little bit extra for more extensive cover.

You can also increase the voluntary excess to reduce the premium price – but make sure the excess is affordable, in case you need to claim.

Finally, when you review your quotes, you should consider the quality score associated with each policy. We rate each policy on a number of factors that our customers find most important, to highlight how extensive the cover is.

Did you find this helpful? Why not share this article?

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