December 15, 2005 Show
Commercial auto policies specify the extent of coverage by using symbols to indicate what vehicles are included in the coverage. The declarations page of your auto policy outlines coverage areas (liability, uninsured motorist, medical payments, etc.) with coverage symbols that apply to the type of insurance. The applicable symbols are numbers 1 through 9. Symbol “1” is the broadest – “any auto”. Symbol “9” provides coverage for non-owned vehicles only. Using symbol “7” reduces the coverage to claims from vehicles listed on the policy only. Insurers sometimes use combination of symbols – 8 and 9, for example, to provide coverage for hired and non-owned autos. Symbol 1 in the liability section would provide coverage for any auto liability claim brought against an insured. Symbol 7 in the liability section would limit liability coverage to claims that come from a vehicle listed on the policy – significantly restricting the coverage. Here are all the symbols and their meanings: 1 = Any “Auto”. This is the broadest symbol designation and covers any “auto” including borrowed, hired, owned, leased. 2 = Owned “Autos” Only. This symbol covers any “auto” owned by an insured. Coverage also applies to any “trailer” while it is towed by an owned vehicle. 3 = Owned Private Passenger “Autos” Only. This symbol covers only private passenger type “autos” owned by the insured, including any private passenger type that may be acquired after the policy begins. 4 = Owned “Autos” Other Than Private Passenger “Autos” Only. This symbol covers all “autos” other than private passenger type “autos” (vans, trucks, motorized equipment) owned by an insured, including such vehicles that may be acquired after the policy begins. The symbol also applies to any “trailer” while it is towed by an owned vehicle. 5 = Owned “Autos” Subject To No-Fault. Any “auto” owned by an insured that is garaged or licensed in a state where no-fault benefit laws exists. This symbol also applies to any “auto” acquired after the policy begins. 6 = Owned “Autos” Subject To A Compulsory Uninsured Motorist Law. Any “auto” owned by an insured that is garaged or licensed in a state where drivers are required to carry uninsured motorist coverage. This symbol also applies to any “auto” acquired after the policy begins. 7 = Specifically Described “Autos”. Only those “autos” that are specifically listed on the policy are covered. The symbol also applies to any “trailer” while it is towed by a listed vehicle. 8 = Hired “Autos” Only. This symbol covers only those “autos” that an insured leases, hires, rents, or borrows. However, it does not include “autos” leased, hired, rented, or borrowed from an employee, partner, or member of an insured’s household. 9 = Nonowned “Autos” Only. This symbol covers only those “autos” an insured does not own, lease, hire, rent, or borrow that are used in the insured’s business, including “autos” owned by employees, partners, or members of an insured’s household, but only while those non-owned “autos” are used in the insured’s business. Related Posts
Recently, I got this inquiry in LinkedIn: “If a business has volunteers that they reimburse for mileage is that now a hired auto? Per the [insurer] it is but hired isn’t defined in the policy.” Under ISO rules and forms, Symbol 8 applies to nonowned autos leased, hired, rented, or borrowed by the insured, while Symbol 9 applies to nonowned autos NOT leased, hired, rented, or borrowed by the insured. For a detailed discussion, including case law citations, I would refer the reader to the discussion at IRMI (subscription required). For an opinion, I believe this to be a Symbol 9, not Symbol 8, liability exposure (of course, to remove all doubt, use Symbol 1). “Hired” usually refers to compensation beyond simple mileage reimbursement. “Borrowed” may not involve any compensation but likely requires some degree of possession and control of the vehicle, not just someone using their auto to do a favor for the insured. Often hired auto coverage, for example when renting or leasing an auto, necessitates physical damage coverage in order to comply with the insured’s contractual obligation to cover damage to the vehicle. Under ISO rules, physical damage coverage is available under Symbol 8 and not Symbol 9. Is the insurer willing to provide physical damage coverage for the autos of volunteers? Highly unlikely. More likely they wouldn’t treat such vehicles any differently than they would the autos of employees which are usually subject to Symbol 9 coverage. As for borrowing, coverage expert Mike Edwards, CPCU cites Schroeder v. Board of Supervisors of Louisiana State University, 591 So.2d 342 (La. 1991) where a student used his father’s car to give another student a ride to run an errand at the request of a professor. The state supreme court held that “borrowing” requires the “substantial possession, dominion, control, or the right to direct the use of the vehicle.” Photo by Steve Bowbrick
This image is taken directly from a business auto policy of one of our clients. Notice the circled column titled “Covered Auto Symbols”. That column designates how each coverage in the left column is applied to which vehicles. For example, on the first line, liability for bodily injury is applied to any auto (symbol 1). That means literally what it says. No matter what auto causes the accident, whether it is listed on the policy or not, if the business is found liable, protection applies. The business may own it, they may have rented it, leased it, or even borrowed it from another company. Read the rest of the coverage rows in the same manner. Liability for property damage applies to any auto as well (symbol 1), but notice medical payments only apply to vehicles specifically listed on the policy (symbol 7). Physical damage coverages for comprehensive and collision apply to vehicles listed on the policy AND any hired autos whether listed or not (symbols 7 and 8). ApplicationCarefully consider what vehicles your business operates, who owns them, and then ensure you are comfortable with how each coverage is applied to those vehicles. Adjusting symbols adjusts how coverage applies to vehicles. Does your business have a vehicle that is old but still valuable? If so, despite its age ensure physical damage coverage applies as well as adequate levels of uninsured and underinsured coverage. Or maybe one vehicle periodically carries non-employees. Medical payments would be a great option for that one. Limitations can apply. For example, although any auto (symbol 1) is highly desirable for liability coverages, it may not be available from your insurance carrier or in your line of business. Taking the time to understand business auto symbols is important ensure no surprises arise during a claim. About Bankers InsurancePolicies vary, so please contact us with any business auto insurance questions. We can explain your insurance policies in clear terms. Not a client of ours? Let us earn your business! Each client is assigned a personal agent in our office, given their email address and provided a phone number that rings right on their desk.
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Commercial auto insurance differs significantly from personal auto insurance in terms of insurance premiums and what they include for their customers. Thus, commercial auto symbols will differ from personal auto insurance symbols as well. Business auto insurance forms provide business owners with a few more options for choosing particular coverage types for specific vehicles they own. These options are known as “coverage symbols” or “covered auto symbols.” In commercial auto insurance policies, these numbers provide specific details about the types of vehicles covered. You will see the symbols on the declarations page of your auto policy next to each coverage you have purchased. When interpreting coverage symbols on your policy, you should keep the following points in mind:
What does commercial auto insurance cover?Commercial insurance can provide both liability and physical damage coverage for small and large fleets of vehicles owned by businesses. In addition, the policies cover any damages you or your employees may cause to people or their property while driving. The following provisions may be included in a commercial auto policy:
Compare Quotes From Top Companies and Save Secured with SHA-256 EncryptionPurpose of Insurance SymbolsSymbols are listed below for various coverage types (For example, Symbol 5 for no-fault coverage, Symbol 7 for any type of coverage, Symbol 10 for business or commercial auto, and so on). Policies will only cover vehicles as indicated by their symbols as applicable covered autos. As a result, it is extremely important to carefully review and understand the various coverage symbols so you know exactly what is covered by your policy. A typographical error or a wrong symbol could lead to unwanted complications in the event of a claim. Symbol 1 — Any AutoThis is the most comprehensive symbol available to a person who can show they have insurance on the business auto coverage form. Symbol 1 dictates that coverage is provided for any auto used for business operations. This includes vehicles the insured party owns, rents, or hires for their day-to-day operations. Insurance companies are often hesitant to offer this coverage. It puts them in a position where they may end up covering vehicles they are unaware of. It also makes it difficult to gauge an accurate insurance premium based on the amount of risk they are actually insuring against. Picture this: the insurer writes a policy with symbol 1 coverage for a company that owns only one vehicle. The insured party then rents 25 vehicles to drive around the U.S., making deliveries right after the policy is issued. The insurer has a much higher chance of paying out claims for 25 vehicles they may not even be aware they are insuring. If this were to happen, they would end up losing money on the policy rather than making money. Simply put, the rates they offer cover the vehicles they’re told about, and if they’re not advised that there will be 25 additional vehicles, they have no way of knowing those are suddenly part of the insurance plan. Auto Symbol 2 — Owned Autos OnlyThis symbol is designed to cover exactly what it says — only those vehicles owned by the insured. The real distinction here is the coverage for physical damage. For example, an insured party may want to purchase liability-only coverage for hired and non-owned vehicles. As long as the proposed plan rates work within their budget, this symbol is a good option. By using this plan type, the consumer could easily differentiate the types of coverage on their business vehicles based on ownership status. This symbol does not provide coverage for hired and non-owned vehicles, which are covered under symbols discussed further down the list.
Compare Quotes From Top Companies and Save Secured with SHA-256 Encryption Symbol 3 — Owned Private Passenger VehiclesThis symbol is intended to provide coverage only for private passenger autos and excludes coverage for trucks, buses, and other similar vehicles. There is no coverage for hired and non-owned vehicles under this symbol. A company that uses a few private passenger vehicles for a sales team might request this coverage. Symbol 4 — Owned Autos, Not Private PassengerThis symbol type is the counterpart to the previous option, offering coverage for trucks and buses that would not be covered under symbol 3. This symbol does not offer coverage for any owned, personal vehicles and does not offer coverage for hired and non-owned vehicles. Symbol 5 — Owned Autos — PIP CoveragePersonal injury protection coverage requirements vary by state. In states where it is mandatory (no-fault states), this symbol is added to provide the necessary PIP coverage for vehicles on a policy.
Compare Quotes From Top Companies and Save Secured with SHA-256 Encryption Symbol 6 — Owned Autos — Uninsured Motorist CoverageSimilar to the PIP laws in no-fault states, uninsured motorist coverage is not mandatory on all owned vehicles in every state. Symbol 6 would be applied to any autos that require this coverage in a particular state. Symbol 7 — Specified Auto CoverageSymbol 7 commercial auto is the most commonly used symbol on a business or commercial auto insurance policy. Symbol 7 auto coverage is designed to provide coverage to autos specifically listed on the policy (similar to a personal auto policy). Owned vehicles are listed by VIN, and the policyholder pays a premium to cover those vehicles only. One of the main reasons this coverage symbol is the most prevalent is that it is usually the most cost-effective coverage option. For many insurance seekers, plan cost is often a deciding factor when narrowing down options. Symbols 1, 2, 3, and 4 do not require policyholders to list every vehicle they own on a policy as they are added or removed. These plans come with higher premiums in exchange for their flexibility, as a buffer for the insurance company to protect themselves against paying claims for extra vehicles they are not aware they are insuring. Liability coverage is available on this symbol for non-owned trailers while they are attached to the owned vehicles listed on the declarations page of your policy. There is no coverage for hired and non-owned vehicles under this symbol, but the last two symbols cover those options. Symbol 8 — Hired Auto CoverageSymbol 8 auto coverage only provides coverage for vehicles that are rented, leased, borrowed, or hired for use by a business. Among these qualified autos are vehicles used by drivers for delivery or livery services for a business. For example, if the delivery vehicle for a flower business is out of commission, they may opt to hire a temporary vehicle to make their regularly-scheduled deliveries until their fleet vehicle is ready to hit the road again. Symbol 8 commercial auto insurance would cover any liability claims associated with operating the hired vehicle (an option unavailable under symbol 7). This symbol does not provide coverage for vehicles that are rented, leased, borrowed, or hired from a family member or any other member of your organization.
Compare Quotes From Top Companies and Save Secured with SHA-256 Encryption Symbol 9 — Non-owned Auto CoverageSymbol 9 coverage fills in the provision gaps in Symbol 8. Coverage is provided only for vehicles that the business does not own, rent, lease, borrow, or hire but are used for your business. Personal vehicles owned by employees and used for business purposes are covered under this symbol type. For example, if an employee drives to the post office to mail documents for the insured party using their personal vehicle and the employee causes an accident, symbol 9 coverage would kick in. Symbol 19 — Mobile EquipmentSymbol 19 applies to any land vehicle deemed to be mobile equipment under the company’s auto insurance policy. This symbol is rarely used as its provisions are mostly covered in the definitions of symbols 1 and 2 (equipment like a bulldozer and forklift are also considered vehicles driven on public roads) or any other symbol that triggers coverage for your commercial vehicles. Symbol 19 usually appears in conjunction with symbol 7. Additionally, you can use it if you purchase mobile equipment during the policy period (provided the vehicle is insured for liability and none of the existing policy symbols fit the situation). What vehicles do these auto symbols refer to?A commercial auto insurance policy and its corresponding coverage symbols usually refer to these vehicles:
Compare Quotes From Top Companies and Save Secured with SHA-256 Encryption What does the custom symbol on my declarations page mean?Occasionally, the type of coverage needed may not fit neatly under an existing symbol. In such cases, a special or custom symbol is added to the policy. With custom symbols, the insurer and named insured may agree on modified wording better suited for defining “covered autos” for the policy. Most custom symbols include a detailed explanation of the symbol’s meaning and the policy’s relevant coverages. Using Commercial Auto Insurance Symbols CorrectlyEnsure you know what vehicles your business operates, who owns them, and how each policy applies to those vehicles. A symbol can be adjusted to reflect how coverage applies to a vehicle. For instance, a business that owns a vehicle that frequently carries non-employees would benefit from a policy that includes medical payments. The Bottom LineUnderstanding these symbols may feel like learning a new language, but understanding your coverage is integral to protecting your business on the go. We understand it can be challenging to find affordable plan rates, as well as what kind of coverage you and your company need. Before deciding on a suitable policy, be sure to compare insurance quotes online and speak to an independent insurance agent to ensure you get the exact coverage you or your business need.
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