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BUSINESS AUTO REPORT
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| Automobile
Risks can sink you fast! |
| And how you as a Contractor can finally
get the peace of mind you work so hard for! |
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Automobile
Risks can sink you fast!
You think nothing of tossing the keys to the pickup to
somebody and telling him to go to the "HOME DEPOT". But
THINK AGAIN—You might as well load the bed of the truck with your
house, savings, business and kid's college fund—IN CASH—and then
let Moe, Larry or Curly head out for the open highway! Your autos
are probably the single largest exposure to loss you have. Each
time your autos go down the street (regardless of who is driving
the vehicle) your entire bank account rides with it!
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| Owned
Auto Risks |
- You go out and buy a truck—simple enough—or you lease it—more
and more common—you have an exposure. You are now responsible
for anything that happens to this auto, no matter who drives it!
Give it to your worker to run an errand— you are responsible
. Give it to your brother to move a refrigerator on the
weekend— you are responsible . Let your kid take
it camping— you are responsible .
- If your kid takes the truck and lets his / her sweetheart drive
it— you are responsible .
- WARNING! When you rent a car on your next trip—LOOK OUT! You
may be taking on more than you realize. Read that agreement and
be sure that the "renter" is stated to your advantage!
If your auto coverage is corporate—the agreement must be corporate!
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| Other Auto Exposures
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| There are three basic exposures in
addition to owned autos, which are non-owned autos, hired autos and
borrowed autos. |
- Non-owned autos are autos that you don't own,
but for which you may be held responsible. The most common example
is when an employee uses his own auto for work purposes. For instance,
a guy takes his own truck to the Home Depot on a work errand.
If he has an accident, then you are ultimately responsible.
- Hired Autos are autos that you rent or lease
(short term). BE CAREFUL! Car rental companies will always try
to list YOU (the individual) as the renter. If you allow this
then your business auto policy may not respond to claims filed.
Business auto policies usually list your company as the insured.
If you don't have that name in the "renter" spot, then
you will not be insured! I personally DO NOT OWN any autos—they
are all business owned. So when I rent a car, I quietly write
in the name of my business as the renter. I don't ask the clerk—I
just do it!
- Borrowed Autos are autos you borrow such
as specific equipment for a job. If the owner of the auto you
borrow has little or no insurance then you are responsible. BE
CAREFULL! An auto you "borrow" from your employee or
family member is usually NOT a borrowed auto from the perspective
of your insurance company.
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| TIP—Be sure your personal auto policy
meshes with your business auto policy! Consult your accountant (for
taxes) and your attorney (for legal advice) about where and how your
personal auto should be titled (owned). There is a wide-range of coverage
options available to tailor your policy to meet your needs. You must
be sure to disclose your whole situation to your insurance agent in
order to receive proper coverage. |
Limits,
Limits, Limits
Put the armor where the bullets are coming from: You get
certificate requests almost every day—they always ask for Business
Liability with $1,000,000 limits and Workers Comp. They almost NEVER
mention auto liability. THAT'S NOT BECAUSE IT'S NOT IMPORTANT! IT'S
BECAUSE ITS' NOT IMPORTANT TO THEM! Because no one bugs you for auto
limits - you tend to skimp on it. DON'T DO IT! It's your neck, your
assets and your future—PROTECT YOURSELF!
TIP—Be careful of where your autos stay at night. This is for real—You
can use you autos in downtown Indianapolis all day long, but they
will be priced based on where they are "garaged," or where
they stay at night. If your autos go home to a suburban county at
night, be sure your policy says so. THIS IS NOT CHEATING—THIS IS
PLAYING BY THE RULES!
Now—you must manage your drivers. Let it be know that you don't tolerate
irresponsible driving of any auto AND that you reward good drivers.
Be willing to pay a bonus for clean driving records. It will pay off
big time for you in the long run!
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Do
not lie
Insurance companies will review your entire file—back to
the original application—if there is a serious claim. If they can
find a MATERIAL item that you lied on they will try to deny the claim.
This begs the question, "What is a MATERIAL item?" The answer
will depend on the company, the adjuster, case law and THE SIZE OF
THE CLAIM. In my opinion, if you lie about things like who drives
the autos, how they are used or the size and weight of the auto—you
might find yourself in a world of hurt. It's
almost impossible to defend a lie.
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Don't
try to fit a square peg into a round hole.
If you need a personal auto policy—get one. Don't try to force a Business
Auto Policy to do that job. Don't try to hide your 17-year old daughter
with tickets and a new cherry red Corvette on your business policy—cater
your policies according to a realistic standard. |
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