May 25, 2021
Agency
Does Commercial Auto Insurance Cover Vehicle Fires? ?
Does Commercial Auto Insurance Cover Vehicle Fires?
Most business owners buy commercial auto insurance if they own vehicles used in their operations. If one of these vehicles is in an accident, this coverage covers the costs of repairs.
Commercial auto insurance also covers a variety of damage from other hazards, including vehicle fire. If you have the appropriate coverage on your policy, it is likely to pay for any fire damage. This must be added to your policy in order to have the benefitt isn’t automatically included.
The Causes of Vehicle Fires
Cars can catch on fire due to a variety of hazards. In cases of collisions and other fires, these are often unavoidable. Therefore, auto insurance is likely to cover the damage. Most commercial auto policies will pay for fire damage up to the policy’s stated limits.
Getting Coverage for Fire Damage
Most states require auto insurance for all drivers. However, the requirements are usually only for liability insurance. Liability insurance covers third-party losses for which the driver is responsible. Under a basic commercial auto policy, a company’s own vehicle will likely have no coverage for its damage.
So, fire damage will have no coverage unless you add a couple of extra benefits into your policy. These are:
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Collision insurance, which pays for vehicle damage resulting from wrecks. If a wreck leads to a fire, this coverage compensates the commercial vehicle owner for their car’s damage.
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Comprehensive insurance, which covers vehicle damage that results from hazards other than collisions. So, if your car catches on fire due to an engine problem, this coverage can repay you for your damage.
Your agent will work within the terms of your policy to determine how much the policy will pay you. All collision and comprehensive policies include policy deductibles. If the fire damage costs less than the cost of your deductible, then your policy won’t cover you. Additionally, intentional fires set by the owner doesn’t have coverage.
Don’t forget, if you carry cargo or equipment in your vehicle, you may also need to buy inland marine insurance for those items. This coverage comes separately from most commercial auto coverage, and covers items in transit that experience fire damage.