Company Autos
When it comes to company autos, there are several very important insurance coverages that often get overlooked.
Drive Other Car (DOC) coverage
Loan/Lease Gap coverage
Employees as Additional Insureds
DOC:
This is important for employees who drive company cars and do not have their own personal auto insurance. In order to be covered while driving autos other than the company car, say a car belonging to a spouse, relative or friend, then alternative liability coverage is necessary in addition to the commercial auto policy. This can be accomplished by either adding the DOC endorsement to the commercial auto policy or by the employee obtaining a personal auto policy. Often, family vehicles are insured under the other family member’s names – in which case, it is usually cheaper to get the employees name added as an additionally insured driver under the family auto policy.
Loan / Lease Gap:
In the event of a total loss, situations can arise in which the actual cash value of the car is less than what is still owed on the vehicle or the lease payoff amount. Note that the value of a new car can be 20-30% less than what you paid for it for several months after you drive it off of the new car lot. This endorsement when added to the physical damage portion of your commercial auto policy endeavors to cover unforeseen gaps between the cars value and what is still owed. Early termination fees could also be covered by such endorsement.
Employees as Additional Insureds:
Once in a while we see employee owned autos get insured by the company and get referred to as company autos. Since technically you cannot insure property that you do not own, a problem can arise if a claim occurs and is submitted to the commercial auto carrier but the car is registered under the employee’s name. To avoid the potential denial of coverage in this case, it is necessary to add the registered owner of the vehicle as an additional insured on the commercial auto policy.
These endorsements are simple and inexpensive to obtain – but you do need to ask for them!
Call me – I can help!
Carol L. Corporales, CIC
Wateridge Insurance Services
858.202.6187 Direct
ccorporales@wateridge.com
