Physical Damage
COVERAGE FOR THE VEHICLE ITSELF
What Is Commercial Vehicle Physical Damage Insurance?
Physical Damage Insurance helps protect qualifying insured commercial vehicles when they are damaged by covered causes of loss. It is especially important when a business has significant money invested in tractors, trucks, trailers, vans, pickups, or other vehicles that would be costly to repair or replace.
WHEN THE VEHICLE COLLIDES
Collision Coverage
Collision coverage may help repair or replace a qualifying insured commercial vehicle when it is damaged by a covered collision or overturn, subject to the deductible, valuation provisions, exclusions, and other policy terms.
Collision With Another Vehicle
A covered tractor, truck, van, pickup, or other insured vehicle is damaged after colliding with another automobile.
Collision With an Object
A vehicle strikes a barrier, pole, wall, loading structure, stationary object, or another object during a qualifying covered loss.
Rollover or Overturn
A commercial vehicle or scheduled trailer rolls onto its side or overturns during a qualifying accident.
WHEN DAMAGE HAPPENS WITHOUT A COLLISION
Comprehensive Coverage
Comprehensive coverage may help protect a qualifying insured commercial vehicle against certain covered non-collision losses. The actual covered causes of loss depend on the policy.
Theft
May help when a qualifying insured vehicle is stolen, subject to policy conditions and claim requirements.
Fire & Vandalism
May help with qualifying physical damage caused by fire, vandalism, malicious mischief, or other covered causes of loss.
Weather & Other Events
Hail, wind, falling objects, animal contact, and other non-collision losses may be covered depending on the policy form.
ANOTHER PHYSICAL DAMAGE OPTION
Specified Causes of Loss
Some commercial vehicle policies offer Specified Causes of Loss instead of Comprehensive coverage. Rather than broadly covering qualifying non-collision damage subject to exclusions, this form generally responds only to causes of loss specifically listed in the policy.
Why this matters: Comprehensive and Specified Causes of Loss are not interchangeable. Businesses should understand which form they purchased and which causes of loss are actually insured.
FROM BUSINESS CARS TO TRACTOR-TRAILERS
Physical Damage for Many Types of Commercial Vehicles
Eligibility varies by insurance company, vehicle type, value, age, use, condition, business operation, and other underwriting factors.
Tractors
Day cabs, sleeper tractors, and other eligible commercial tractors.
Straight Trucks
Eligible straight trucks used in commercial and transportation operations.
Box Trucks
Local, regional, delivery, distribution, and other qualifying box trucks.
Dump Trucks
Eligible dump trucks and specialized commercial truck configurations.
Tow Trucks
Eligible wreckers, rollbacks, and other towing vehicles.
Cargo & Passenger Vans
Commercial vans used in qualifying business operations.
Pickups & Business Cars
Eligible pickups, sedans, SUVs, and other company vehicles.
Owned Trailers
Qualifying owned trailers may be scheduled for physical damage protection.
DO NOT FORGET THE TRAILER
Physical Damage for Owned Commercial Trailers
A business that owns trailers may have substantial value invested beyond the power unit. Qualifying owned trailers can often be scheduled for physical damage coverage when eligible.
Dry Vans & Reefers
Eligible owned dry van and refrigerated trailers may be scheduled based on their values and the applicable policy structure.
Flatbeds & Specialized Trailers
Flatbeds, step decks, dump trailers, and other eligible owned trailers may require accurate descriptions and values.
Owned vs. Non-Owned Matters
Physical Damage for an owned trailer should not automatically be assumed to apply to equipment the business does not own. Ownership and policy scheduling matter.
YOUR VEHICLE VALUE CAN CHANGE OVER TIME
Make Sure the Values on Your Policy Still Make Sense
Commercial vehicle values can change as equipment ages, vehicles are replaced, expensive components are added, or the fleet changes. Reviewing scheduled values periodically can help keep the policy aligned with the equipment being insured.
THE LIMIT, VALUE & DEDUCTIBLE ALL MATTER
Understanding Commercial Vehicle Physical Damage Before a Loss
The biggest physical damage questions often appear after an accident: How is the vehicle valued? What deductible applies? Is attached equipment included? What happens if the vehicle is a total loss? Those details are worth understanding before a claim occurs.
THE NUMBER ON THE VEHICLE SCHEDULE DESERVES ATTENTION
How Is a Commercial Vehicle Valued After a Total Loss?
Physical damage policies can use different valuation provisions. The amount shown on a policy schedule should not automatically be assumed to be the amount that will be paid after a total loss. The policy’s valuation language determines how the settlement is calculated.
Actual Cash Value
Some policies use the vehicle’s actual cash value at the time of loss, considering factors such as age, condition, mileage, equipment, and market value.
Stated Amount
A stated amount can establish a maximum used in the loss settlement calculation, but it does not necessarily guarantee that exact amount will be paid.
Policy Wording Controls
The loss-settlement provision should be reviewed to understand whether payment is based on actual cash value, stated amount, cost of repair, another valuation method, or the least of specified calculations.
HOW MUCH OF THE LOSS DOES THE BUSINESS RETAIN?
Choosing a Physical Damage Deductible
The deductible is generally the amount applied to a covered physical damage loss before the insurer’s payment is calculated. Higher deductibles may reduce premium, but they also increase the amount the business may have to absorb after a loss.
Vehicle Value
A deductible that makes sense for a $25,000 commercial vehicle may not be appropriate for a tractor worth substantially more.
Fleet Size
A business operating multiple vehicles should consider how much it could comfortably absorb if several physical damage losses occur.
Collision vs. Comprehensive
Policies may apply different deductibles to Collision, Comprehensive, Specified Causes of Loss, theft, or other qualifying physical damage losses.
REAL-WORLD VEHICLE DAMAGE
Examples of Physical Damage Losses
Tractor Is Damaged in a Collision
A covered tractor collides with another vehicle and requires substantial repairs to the front end, suspension, cab, or other components.
Commercial Vehicle Is Stolen
A qualifying insured truck, van, or other commercial vehicle is stolen from an eligible location.
Truck Rolls Over
A covered dump truck, tractor-trailer, box truck, tow truck, or other commercial vehicle overturns during a qualifying accident.
Hail Damages Several Vehicles
A severe storm damages multiple covered commercial vehicles parked at the same business or fleet location.
Vehicle Is Vandalized
Windows, body panels, mirrors, lights, or other vehicle components are intentionally damaged in a qualifying vandalism loss.
Fire Causes a Total Loss
A fire severely damages a qualifying insured commercial vehicle and the insurance company determines that repairing it is not economically practical.
THE CHASSIS MAY NOT REPRESENT THE FULL VALUE
Attached Equipment Can Add Significant Value
Commercial vehicles often contain equipment that can substantially increase their total value. The policy and scheduled vehicle value should accurately reflect eligible permanently installed equipment when applicable.
Tow & Recovery Equipment
Wheel lifts, booms, winches, rollback beds, hydraulic systems, and other qualifying permanently installed equipment can materially affect vehicle value.
Dump Bodies & Specialized Bodies
Dump bodies, refrigeration units, service bodies, liftgates, and other installed components can make the complete commercial vehicle worth considerably more than the chassis alone.
Accurate Values Matter
When significant equipment is permanently installed, the business should understand how that equipment is treated under the physical damage policy and vehicle valuation.
WHEN SOMEONE ELSE HAS A FINANCIAL INTEREST IN THE VEHICLE
Financed & Leased Commercial Vehicles
A lender or leasing company may require physical damage coverage while it has a financial interest in the commercial vehicle. The policy may identify the applicable lender, lessor, or loss payee according to the arrangement and insurer requirements.
Vehicle Loan
Lenders commonly require qualifying physical damage coverage while there is an outstanding loan secured by the vehicle.
Vehicle Lease
Commercial lease agreements may establish physical damage requirements, deductibles, valuation provisions, or other insurance conditions.
Loss Payee Information
The lender or leasing company may need to be properly shown on the policy according to the applicable insurance and financing arrangement.
WHEN REPAIRING THE VEHICLE NO LONGER MAKES SENSE
What Happens When a Commercial Vehicle Is a Total Loss?
The insurance company will generally evaluate the extent of damage, repair costs, vehicle value, applicable valuation method, deductible, salvage considerations, and policy terms before determining whether a covered vehicle is a total loss.
Vehicle Condition
Age, mileage, condition, maintenance, specifications, equipment, and comparable vehicles may be relevant when value is evaluated.
Repair Cost
The estimated cost to safely repair the vehicle is generally compared with applicable valuation and total-loss criteria.
Deductible
The applicable physical damage deductible can reduce the amount payable for a qualifying covered loss.
Valuation Provision
The policy’s loss-settlement language ultimately determines how the insurer calculates the covered amount payable.
DO NOT SET THE VALUE ONCE AND FORGET IT
When Should You Review Physical Damage Coverage?
Physical Damage Learning Center
Understand How Your Commercial Vehicle Is Protected
Explore practical information about vehicle valuation, deductibles, total losses, collision, comprehensive coverage, and protecting commercial equipment.
ADDING OR REPLACING COMMERCIAL VEHICLES?
Make Sure the New Equipment Is Properly Reflected on the Policy
Vehicle values, permanently installed equipment, trailer values, deductibles, financing arrangements, and the selected physical damage coverage can all change when equipment is added or replaced.
Commercial Vehicle Physical Damage Questions
Physical Damage Insurance FAQs
Clear answers about Collision, Comprehensive, Specified Causes of Loss, commercial vehicle values, deductibles, total losses, trailers, financing, and specialized equipment.
TRACTORS. TRUCKS. TRAILERS. VANS. PICKUPS. COMMERCIAL VEHICLES.
Protect the Equipment Your Business Has Invested In
Best Formula Insurance can help transportation companies and businesses review Physical Damage Insurance for eligible commercial vehicles, including Collision, Comprehensive, Specified Causes of Loss, vehicle valuation, deductibles, owned trailers, and permanently installed equipment.
Important: This page provides general information about Commercial Vehicle Physical Damage Insurance and does not modify, expand, guarantee, or confirm insurance coverage, vehicle valuation, eligibility, pricing, claim payment, or total-loss settlement. Collision, Comprehensive, Specified Causes of Loss, theft, fire, vandalism, weather, glass, rollover, permanently installed equipment, owned trailers, loss payees, valuation methods, deductibles, total-loss calculations, repair provisions, exclusions, and other physical damage terms vary by insurance company, state, vehicle type, ownership, operation, vehicle value, financing arrangement, equipment, condition, age, and individual circumstances. A stated amount or scheduled value should not be interpreted as a guaranteed claim payment unless specifically provided by the issued policy. Mechanical breakdown, wear and tear, maintenance, deterioration, and other causes may be excluded or limited. All coverage is subject to applicable law and the terms, conditions, definitions, exclusions, limits, deductibles, valuation provisions, endorsements, schedules, and requirements of the issued policy.