Of the various types of property insurance available to a small business owner, a policy covering the use of automobiles is one of the most common.
An automobile insurance policy is issued as a single comprehensive policy that offers both liability and property protection (see our discussion of automobile liability insurance
Property coverage in an automobile policy is subdivided between two types of coverage: collision (which covers losses due to a collision, where the insured is at fault) and comprehensive (which covers losses from fire, and other acts of nature, theft and vandalism).
Automobile insurance property coverage is issued on a named-peril basis. Thus, a failure to mention in the policy one form of coverage (e.g., comprehensive) acts as an automatic exclusion of this form of coverage.
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Both forms of property coverage in an automobile policy (i.e., collision and comprehensive) will be subject to deductibles. One way to reduce premium costs is to raise the deductible on the policy. For example, many advisors recommend a $500 deductible for collision coverage. The savings in premium costs can be significant.
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