Commercial Auto Insurance
A comprehensive guide to commercial auto insurance, including wholesale brokerage, E&S insurance, and no-fault laws.
Filing Claims
Be very careful when filing claims. Whatever you file goes on your record, even if it's not covered. Always call a broker first to review your policy before actually talking to the insurance company.
Wholesale Brokerage
A type of insurance broker who acts as an intermediary between a retail broker and an insurer.
Think of a broker as a phone operator you call, then that operator has other operators who don't talk to people who call, but understand particular regions very well and know where to connect the call. They tell the operator, who then actually connects the call and communicates with you.
Retail insurance brokers work with wholesale brokers, not the insured. Wholesale brokers offer value particularly in the case of challenging market conditions and/or difficult-to-place risk.
E&S Insurance
Excess and Surplus Lines Insurance was created for specialized and complex risks traditional insurance doesn't cover.
E&S is a specialty insurance market informed by the focused, industry knowledge of wholesale insurance distributors who can tailor coverage to meet limits for difficult exposures that a primary insurance policy doesn't cover.
Note: E&S insurers typically don't work directly with the insured - you need to go through a retail broker who works with wholesale brokers.
Assigned Risk
Assigned risk is a method of providing certain types of insurance to those who otherwise would be denied coverage because they would be considered too high-risk.
Key points:
- Individuals who have failed to gain coverage through the private market can apply through their state's assigned risk "pool"
- Companies who sell vehicle and workers' compensation insurance are required to participate
- Rates are much higher than policies purchased through the private market
- Most plans offer only limited coverage, guaranteeing only the minimum required by law
No-Fault Law (New York)
New York is a no-fault state under the NY Comprehensive Automobile Insurance Reparations Act.
Key Points
- In "no-fault" states, drivers must carry personal injury protection (PIP) insurance
- The law ensures that persons injured in an auto accident receive prompt medical treatment and income replacement without the burden of litigation
- PIP coverage pays for medical expenses after a car accident, no matter who was at fault
- No-Fault does NOT apply to motorcyclists/vespas or people found to be operating while intoxicated
Types of Negligence
- Pure contributory: The insurance company will only reimburse a driver if they're completely blameless
- Pure comparative (New York uses this): A driver's payout is based on a percentage of fault - even if other driver is only 5% at fault, you still get 5% of the claim
- Modified comparative: Also considers proportion of fault, but sets a threshold (50% or 51%)
Filing Deadlines
There is a very short time - only 30 days from the date of the accident - to file an application for these benefits. Most health insurance do not cover personal injuries from a car crash.
Serious Injury Threshold
To sue or make a claim against the at-fault vehicle, you must reach the no-fault threshold (serious injury):
- Fracture (automatically serious)
- Significant scarring (automatically serious)
- Loss of a fetus (automatically serious)
Lost Wages Under No-Fault
You can claim lost earnings and out-of-pocket expenses:
- You're entitled to receive 80% of crash-related lost earnings up to $2,000 a month
- Requires your employer to send a Wage Verification Report
- Doctor must specify length of disability
Out-of-Pocket Expenses
No-fault will reimburse you for:
- Travel expenses to/from doctors or medical treatment
- Medications, braces, and bandages
- Up to $25/day for other related incidentals for one year post-accident
MVAIC
If you cannot determine the insurance company in time, send a notice to the New York State Motor Vehicle Accident Indemnification Corporation (MVAIC). MVAIC steps in where there is no insurance.
Important Warning
DO NOT ARBITRATE a no-fault denial or allow your doctor to do it for you until your lawsuit is resolved. An adverse finding at arbitration can destroy your claims in the underlying lawsuit.
Rideshare Insurance (Uber Example)
When available/waiting for a ride request:
Third-party liability if your personal auto insurance doesn't apply:
- $50,000 in bodily injury per person
- $100,000 in bodily injury per accident
- $25,000 in property damage per accident
When en route to pick up riders and during trips:
- $1,000,000 third-party liability
- Uninsured/underinsured motorist bodily injury (varies by state)
- Contingent comprehensive and collision (up to actual cash value with $2,500 deductible)
Delivery
Same as rideshare, but NOT including coverage for uninsured/underinsured motorist bodily injury.
Public-Hire vs Private-Hire
- Public-Hire: Taxis that can be hailed off the street; ride doesn't have to be pre-booked
- Private-Hire: Must be booked in advance; don't advertise that they're a taxi