Test Your Knowledge: Commercial Auto Insurance Quiz
If it’s been a while since you’ve busted out the commercial auto insurance trivia cards, you’re in luck. Put on your parking brake and thinking cap and take the quiz. The answers and explanations are at the end. Absorb this knowledge and use it to stupefy your friends and colleagues.
1. Which statement describes commercial auto insurance the best?
A) It’s auto insurance for large corporations with over 1,000 employees.
B) It’s auto insurance that’s shown during commercial breaks.
C) It’s auto insurance for vehicles of any size that are owned by businesses or used for business purposes.
D) It’s auto insurance for large vehicles like delivery vans and semitrucks.
2. Commercial auto insurance is mandatory in every state except New Hampshire.
True or false
3. What does bodily injury liability cover in a commercial auto policy?
A) Damage to your own vehicle
B) Your employees’ medical expenses
C) Injuries caused to others in an accident
D) All of the above
4. Personal auto policies automatically cover vehicles used for business.
True or false
5. How you use your business vehicle impacts the policy premium.
True or false
6. What is the purpose of adding medical payments, or “MedPay,” coverage to a commercial auto insurance policy?
A) To cover legal fees
B) To repair the vehicle
C) To cover medical expenses for your drivers and passengers, regardless of who’s at fault
D) To cover damage to property other than vehicles
7. Every commercial auto insurance policy automatically covers cars you own or lease.
True or false
8. What type of commercial auto insurance protects against liabilities involving vehicles your business doesn’t own?
A) Physical damage coverage
B) MedPay coverage
C) Uninsured/underinsured motorist coverage
D) Hired and nonowned auto coverage
9. What is not included under property damage liability in a commercial auto insurance policy?
A) Damage to other people’s property
B) Damage to your own vehicle
C) Damage to other people’s vehicles
D) Damage to buildings or structures
10. Vehicles with U.S. Department of Transportation (USDOT) serial numbers are insured the same as vehicles that don’t have USDOT numbers.
True or false
11. Commercial auto policies automatically cover your car for flood damage.
True or false
12. A comprehensive commercial auto policy covers your vehicle’s custom paint job or vinyl logo wrap.
True or false
13. Cyber liability insurance can cover data breach expenses, including client and employee notification, credit monitoring, and legal fees.
True or false
14. Your insurance fully covers you if another driver is uninsured, underinsured or flees the scene.
True or false
See how you did below.
Answers and explanations
1. C. Commercial auto insurance is sometimes called business auto insurance. Commercial auto insurance protects any vehicles owned or used by a company, from small businesses with one car to large corporations with a fleet of vehicles. Commercial auto covers different damages and liabilities, from accidents to theft. You can buy policy add-ons to suit your operations. Your agent will advise you on the best coverage.
2. True. Auto insurance is legally required in every state except New Hampshire. However, New Hampshire has laws regarding financial responsibility. Drivers are held financially responsible for bodily injury or property damage they cause. Failure to meet financial obligations can result in severe penalties from the state, including license suspension and hefty fines.
Basic auto policies protect your business from liability if you have an accident. You can add coverage for employee drivers, custom paint jobs, equipment, cargo, trailers, leased vehicles, medical bills, etc.
3. C. Bodily injury liability covers injuries to others if you or your employee causes an accident while driving a company vehicle. It doesn’t cover your injuries, your employees’ injuries or damage to your vehicle.
4. False. Personal auto policies do not automatically cover vehicles used for business purposes. In fact, most policies specifically exclude coverage for business activities. For example, if you register your car in your company’s name, your company must buy a commercial auto policy for it.
You’re at risk if your car’s registered in your name with personal auto coverage, and you drive it for business and personal reasons. Your claim could be denied if you get in an accident while driving it for business reasons. That’s an easy path to bankruptcy.
Business owners often choose commercial auto policies that cover personal use to get the most protection. Call your agent to discuss your situation.
5. True. How you use your vehicle affects its auto premium rating. The following are just some of the factors that can affect the risks you encounter when using your vehicle:
- Making deliveries
- Driving frequently or long distances
- Transporting goods (and certain types of goods)
- Hauling heavy loads
- Driving in certain locations
The riskier the activities, the higher the cost to insure them. For example, you’d get a lower premium if you used your van to transport paper files than if you used it to transport hazardous chemicals.
6. C. MedPay coverage helps pay for your drivers’ or passengers’ medical or funeral costs, regardless of who’s at fault in the accident.
7. False. Commercial auto insurance covers cars you own. If you rent or lease vehicles for business reasons, consider adding “hired auto” coverage. It’s sometimes bundled as “hired and nonowned auto.”
8. D. Hired and nonowned auto, or “HNOA,” insurance covers rented or borrowed vehicles used for business. It also covers employees who drive their cars for company businesses. Examples of driving for company business include running errands, making sales calls and driving between multiple office locations. These activities can leave you open to liability if there’s a lawsuit.
9. B. Property damage liability covers damage you or your employees cause to others’ property while driving a company vehicle. It does not cover damage to your vehicle.
10. False. You will have additional liability coverage requirements if you have a U.S. Department of Transportation (USDOT) serial number.
Your USDOT classification and the minimum financial liability levels set by the Federal Motor Carrier Safety Administration (FMCSA) determine the coverage you need. For example, let’s say your charter bus company regularly transports 16 to 24 passengers across state lines for a historical tour. You have a USDOT series number, and you’re registered with the FMCSA. The law requires at least $5 million in liability coverage.
Learn more about these laws in the Code of Federal Regulations 49, Part 387. A seasoned agent can help you secure appropriate levels of insurance and proof of insurance for legal compliance.
11. False. Comprehensive auto insurance protects against noncollision damage to your vehicle, like natural disasters, vandalism and wild animal collisions. Collision coverage only protects against damage from collisions with other vehicles or stationary objects.
Let’s say you park your company car in a lot for the night. Flash rains cause flooding, worsened by overrun sewage runoff systems. Your vehicle ends up under several feet of water, a total loss. You only have collision coverage, so your insurance company denies your claim.
Ask your agent about coverage for the remaining value of your car.
12. False. Standard policies will not cover custom paint jobs or vinyl wraps unless they’re included in the policy. For example, if your food truck is damaged in an accident, you’ll want coverage to repair the custom artwork.
Tell your agent about custom branding so your vehicle and brand look their best, even after an accident.
13. True. Cyber liability insurance covers costs incurred due to a data breach, including client and employee notifications, required credit monitoring, and legal fees. A comprehensive cyber liability policy can help with a cyberattack on your cars. Cars and fleets connect using Wi-Fi, artificial intelligence, GPS and other telematics are increasingly at risk, especially if they’re part of a supply chain. And conventional auto policies don’t cover them for cybercrime.
14. False. You’re not fully covered if another driver causes an accident and doesn’t have enough insurance or flees the scene.
Uninsured/underinsured motorist coverage protects against drivers without insurance or enough insurance to cover the damage they cause. Insurance options differ depending on your state, but they typically cover injuries to your drivers and passengers and damage to your vehicle.
A 2023 study by the Insurance Research Council found that one in seven drivers were uninsured. If you or one of your employees gets hit by an uninsured driver, uninsured/underinsured motorist coverage can protect you from the financial fallout.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem.