Removing Autos from the BAP - Business Auto Insurance
Business is bad and I need to save some money on my auto insurance. I want to delete the coverage on some vehicles that aren’t being used right now. They are stored in a secure parking area. Is that OK?
That’s an excellent question and we’re really glad you asked.
Removing vehicles you still own from your business auto insurance policy is probably not a good idea for several reasons.
First and foremost, the State of Texas requires motor vehicle and trailer owners to carry liability insurance on any vehicle that is operated in the state (Chapter 601.052 of the Texas Transportation Code). There are no exceptions for vehicles that are not being operated on a road or that are being stored.
Perhaps an even more important consideration is the possibility that you can be financially responsible for any kind of an accident involving the vehicle, even when it is standing still. For example, if a child gets into the storage area and is injured on the vehicle, you could be held responsible, and the auto insurance policy is the only policy that will provide the needed coverage.
There are other ways you could be held financially responsible for accidents involving the vehicle, and for which you need the coverage provided by the auto insurance policy. Consider these examples:
- What if someone steals the vehicle from your storage facility and has an accident. The injured party might sue you for not providing better security to prevent the theft.
- What if one of your employees unwittingly operates the vehicle without realizing there is no insurance?
- What if you forget to tell us to add the vehicle back to the policy when you are ready to use it again?
These are all good reasons why you should continue the liability coverage on all your vehicles. The physical damage coverage may be important as well. If you owe money on the vehicle, the lien holder requires physical damage insurance. Keeping your vehicle in a storage facility is not an absolute guarantee that it won’t be damaged or destroyed by a fire or windstorm or hail.
Talk to your agent before making a final decision. There may be a way we can shave the premium on your auto insurance without removing all the coverages on a particular vehicle.
Swingle, Collins & Associates specializes in business auto insurance coverage. The descriptions of coverages listed on this website are brief and subject to the provisions, limitations, and exclusions that can only be expressed in your policy and related endorsements. For additional information of how Swingle, Collins & Associates can assist in meeting your coverage needs for business auto insurance please contact your dedicated risk manager to discuss benefits and services.
The information contained on this page is provided for informational and educational purposes only. It contains general information on insurance issues and may not reflect the most current developments in insurance coverage and is unlikely to apply in all factual scenarios. The information does not include all the terms, coverages, exclusions, limitations or conditions that may be contained in the actual insurance contract language. The policies themselves must be read for those details. Sample policy forms will be made available upon reasonable request.