One of the questions we are asked daily is “What are these coverage symbols my Transportation Broker wants me to carry?” While simple to us, we understand that these terms are a little difficult to understand for someone not versed in insurance. With Commercial Automobile insurance, there are coverage Symbols that range on a scale of 1-9, each one carrying a very specific definition.
If you contact an insurance broker and simply ask for a Commercial Automobile premium rate, they are most likely going to rate your account as a Symbol 7 policy. The definition of Symbol 7 in Commercial Automobile is a “Scheduled Auto”. When a policy is written as Symbol 7, the coverage only applies to vehicles listed or scheduled on the policy. If your company has an accident in a vehicle that is not listed on your schedule, the claim will be denied as you never scheduled the vehicle nor paid insurance premiums on the vehicle. Many years ago, Symbol 7 policies were widely accepted by Transportation Brokers in the non-emergency medical transportation space, but that has become a thing of the past.
The majority of Transportation Brokers now require your Auto Liability policy to be written to cover Symbols 2, 8, 9. What exactly does that mean, and why am I being required to carry these symbols? By insurance definition, Symbol 2 means All Owned Autos, Symbol 8 means Hired Autos, and Symbol 9 means all Non-Owned Autos. Essentially if you own it, rent/lease it or borrow it, your Automobile Liability policy must transfer to cover the liability portion of a claim, even if you failed to add the vehicle to your policy. For example, you have a client that has to be picked up from their dialysis appointment, the vehicle that was in route is now on the side of the road with a flat tire, and your other vehicles are tied up. If you, the company owner, send one of your employees to pick that Member up from their appointment in their personal vehicle, which is not listed or “scheduled” on your policy, and an accident while making that pick up, the Automobile Liability from your policy will provide protection to the Non-Owned vehicle being used.
Why is the Transportation Broker asking me to carry this coverage? The answer is simple, Transportation Brokers have to make sure their Members make it to and from appointments, safely and are protected in the event of an accident. If your policy is written as Symbol 7 in the same scenario as above, and an accident occurs, that claim will be denied. A denied claim will most definitely come back financially to your company, as well as to the Transportation Broker. Requiring Transportation Providers to carry Symbols 2, 8, 9 on their Automobile Liability policies, gives an added layer of protection to ensure that if a Member being transported is injured in an accident, liability coverage is in place.
What does this mean for my company, and the premiums I pay? The answer to that question is fairly simple as well. Insurance companies do not typically like to write policies with Symbols 2, 8, 9, as it is a much broader liability exposure for the insurance company. Do they charge an additional premium for these coverage Symbols? Absolutely. You wouldn’t expect to receive 15 additional gallons of gas every time you fill up, or 10 extra bags full of groceries for the same amount you regularly pay, and the same applies here. Most of the time the premium difference is minimal, but there is a difference, as there should be.
There are a couple of important aspects to remember when adding these Symbols to your Automobile Liability policy. First, most insurance companies are not going to provide this coverage to your Transportation Company unless it is a contractual requirement, and poof of contract is typically required when a policy is written this way. Second, if your company runs Hired, or Non-Owned vehicles regularly, but you do not add them to your insurance policy, you risk having your insurance canceled. While you are paying a premium to have this coverage, it is still your responsibility to add all vehicles that you are regularly using in your business to your insurance policy, even if only for a limited amount of time. Never assume you are covered without first discussing with your agent.
In the end, everyone wants to save as much as possible on insurance cost, but not properly insuring your vehicles is a quick way to find the bankruptcy court while harming other people who are counting on you procure and maintain the proper insurance. NEMT Insurance and our retail agents are here to help you navigate this challenging pathway.