Commercial auto insurance can be confusing at best. A lot of clients don’t completely understand their coverage and end up not carrying enough insurance to cover their assets. One of the most important assets for businesses are their employees. Employees help keep things running by solving problems, handling guests and providing services. It’s important that employers understand what coverage they need in order to protect their drivers and any passengers they may carry. Most commercial auto insurance policies come with medical payments, but not all business owners know the limits of their coverage, leaving them to be confused and frustrated when a claim is denied. Commercial Auto Insurance
Medical Payments Coverage
Medical payments coverage is known by many names, such as personal injury protection, PIP and no-fault coverage. No matter what its name, this coverage provides compensation for medical expenses incurred by the driver and their passengers after an accident.
Unlike most coverages, however, this coverage is no-fault—meaning that no matter who caused the accident, the driver and their passengers will be covered. This is crucial for several reasons. If the driver causes an accident, the client’s liability insurance will cover the other driver’s damages, but typically won’t cover the employee or anyone in the vehicle with them. Medical bills are expensive, especially when it comes to an emergency. Having a good medical expense policy in place can help prevent the employee or the company paying for these bills out of pocket. It can also prevent lawsuits from the employee (or employees).
It covers bills such as:
• Hospital visits
• Hospital stays
• Funeral services
• Doctor visits
Exceptions to Medical Payments Coverage
Clients should be aware of the limits on their commercial auto insurance policy. Like with other commercial auto insurance coverages, medical payments are not applicable to accidents that occur while the driver is operating a personal vehicle for personal purposes. For example, if an employee is injured in a crash while driving their vehicle to lunch, this will not be covered under the employer’s commercial auto insurance policy.
Compensation for this coverage may also be limited or denied in incidents where:
• The driver is under the influence of drugs or alcohol
• The driver is committing illegal activities
• The vehicle is a personal vehicle not covered under the employer’s insurance
• Employee injuries are caused by something besides an auto accident
It can include damage done by motorcycles or bikes crashing into the commercial vehicle, however.
Deciding Medical Payments Coverage Limits
Coverage limit needs will vary per client. Medical payments coverage is not legally required by the states, but it’s important for clients to carry the right amount of this coverage. Depending on what limits your agency offers, a client could purchase $1,000, $2,000, $5,000, $10,000 or $25,000 in medical payments coverage or any variable in between.
The limits will also depend on the client’s needs. Business owners who have multiple drivers sharing or using work vehicles may need higher limits of medical payments coverage than smaller businesses with only one driver per vehicle.
Cost of Medical Payments Coverage
Adding medical payments coverage to a commercial auto insurance policy can vary between $2 and $37 a month. Clients should also be aware that the drivers they employ also have an impact on their insurance cost. Commercial auto insurance prices consider not only the policyholder’s driving record, but also that of the drivers insured on the vehicle. Employees with spotty driving records will likely make the employer’s insurance rates rise because they’re seen as more likely to cause an accident and file a claim.