Tag: physical damage insurance

Comprehensive vs. Specified Perils Coverage in Physical Damage Truck Insurance

Western Truck Insurance

Physical Damage Truck insurance is designed to protect commercial trucks and other vehicles used in transporting goods. The Collision portion of the policy provides coverage for damage to the insured truck that occurs as a result of a collision with another vehicle or object. This includes accidents where the insured truck is at fault. The Comprehensive portion, which is also known as “Other than Collision” coverage, insures against a wide range of perils or events that are not related to collisions.

Both Collision and Comprehensive coverages include a deductible, which represents the out-of-pocket expense you must pay before the insurance coverage takes effect. Higher deductibles usually result in lower premiums.

The Other than Collision portion of the policy can be written in two ways:

  • Comprehensive coverage is broad and typically provides protection against a wide range of risks, and is often referred to as “all risks” coverage. It provides coverage for anything unless specifically excluded in the policy. Typical covered perils, but not necessarily limited to,  include damage caused by theft, vandalism, fire, natural disasters, falling objects, and collisions with animals. This coverage tends to come with higher premiums compared to specified perils coverage.
  • Specified Perils coverage is more limited in scope, providing protection only for the specific risks or perils explicitly named in the insurance policy. Commonly covered perils include fire and theft. Since only specified perils are covered, any damage that occurs due to a peril not explicitly listed in the policy would not be insured.

What to Consider When Selecting Comprehensive or Specified Perils Coverage 

It’s important to consider the specific risks your trucks may be exposed to when deciding between Comprehensive or Specified Perils coverage. If a broad range of risks is a concern, Comprehensive coverage may be more suitable. Your budget and cost considerations will also come into play. 

Assess your operational needs and the type of cargo or goods your trucks transport. Certain goods may be more susceptible to specific risks, influencing your choice of coverage.

You also need to consider any contractual obligations or insurance requirements from financing companies and lessors. They may stipulate the type and level of Physical Damage Truck Insurance coverage needed.

About Western Truck Insurance Services

Western Truck Insurance Services is an insurance brokerage specializing in commercial truck insurance. We know this stuff and want to make sure you do too. Our clients appreciate our dedication to finding competitive rates and offering unparalleled service beyond excellent insurance options. They also value how our state-of-the-art automation provides lightning-fast truck insurance quotes, customer service, insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more.

What is Physical Damage Insurance?

Bob Holtzman

Operators of commercial vehicles, such as truckers, need a number of insurance products.

Automobile Physical Damage insurance covers the damage to, disappearance, or destruction of actual automobiles and/or their equipment, such as tractors, trailers or semitrailers, trucks, or private passenger types of vehicles.  Equipment does not include personal effects (clothes, eyeglasses, etc.)

Covered autos are determined by designation symbols that must be tailored to whether the automobile that is to be insured is owned, rented, leased, hired, or borrowed and the type of vehicle.  Premiums usually depend upon the type and age of the vehicle, coverages chosen, garaging location, driver information, deductibles chosen, and loss experience

Such coverage is divided into two major components “collision” and “all perils other than collision.”   Collision covers striking another object (including other vehicles) and overturn of the vehicle.

“All perils other than collision” include loss by fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, falling objects, or the sinking, burning, collision or derailment of any conveyance transporting the auto.  These coverages can be purchased on an all inclusive or comprehensive basis, or a basis where each peril is specifically described (called named peril or limited specified causes of loss.)  In both cases there are some perils which are excluded from coverage.

Excluded perils for which no physical damage insurance coverage is ordinarily provided include nuclear hazards, war or military actions, organized racing or demolition contests, wear and tear, road damage to tires, and damage to most electronic equipment not required for the operation of the vehicle.

Although not mandated by law, like automobile liability insurance, physical damage is ordinarily required by financial institutions that loan money to purchase automobiles.  Since the automobile is used as collateral for the loan, the lender needs to make sure that the collateral remains unimpaired.  The insured’s own equity in his or her vehicle is also protected.

There are ordinarily separate deductibles for the “collision” and “other than collision” coverages.  Deductibles are the portion the insured must pay in the event of a loss.

The amount of coverage is ordinarily limited to the cost of repairing or replacing the damaged or stolen property or its value less depreciation.  If an insurer pays a physical damage claim that is the fault of someone else then the insurance company upon paying the physical damage claim assumes the right to recover the cost from whoever caused the claim.