Physical Damage Coverage

What Is Physical Damage Coverage?

Physical damage is a broad term to describe coverage for your commercial auto vehicle against damages such as collisions, vandalism, fire, and theft. Typically, there are two specific types of physical damage coverages—collision and comprehensive.

Collision coverage provides financial protection against damage to a vehicle from physical contact with another vehicle or other objects. “Other objects” may include animals, fences, rocks, trees, buildings, or other structures.

Comprehensive coverage provides financial protection for claims that occur by something other than a collision. This might be a falling tree branch or a weather-related event such as hail.

Who Needs Physical Damage Coverage?

Most states don’t require comprehensive or collision coverage. Many small businesses carry physical damage coverage for the protection it offers. Physical damage is recommended if your vehicle is newer. Also, you may need it to obtain a lease or loan.

Physical damage coverage is recommended for small businesses to protect against unexpected repairs. Also, some industries are more prone to comprehensive and collision risks than others. For example, construction and building contractors often drive through construction sites that have many vehicles coming and going. Picking up supplies and removing building debris also puts their vehicles at higher risk. Landscapers and tree trimmers also have inherent risks such as falling trees and limbs, storms, and fires.

How Can Physical Damage Coverage Be Customized?

When choosing physical damage coverage, the best place to start is to analyze your own business risks along with your fleet of vehicles. Do you have newer vehicles? Is your business prone to the risks covered by compressive or collision? If yes, then you should strongly consider physical damage coverage.

Customizing coverage typically includes selecting a deductible. The deductible is the amount that you agree to pay out of pocket in the event of a claim. Higher deductibles (cost sharing on your part) equate to lower premiums. So, if you are looking to save money on insurance, your choice of deductibles is a way of customizing coverage to fit into your budget. Unlike liability coverage, you can have different comprehensive and collision limits for each vehicle in your fleet. Some of your vehicles may be older and you may decide to self-insure those risks.

It is also worth noting that when you select physical damage coverages, you are required to submit a stated amount for each vehicle. Forge Insurance can help you estimate the current value, or stated amount, of your vehicles.


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