Tag: truck insurance

What Insurance, Permits, Etc. Do I Need to Get Started?

Bob Holtzman

One of the biggest questions we encounter from new drivers is, “What do I need?” Interstate truckers need a variety of permits, registrations, insurance policies, etc. to ensure they are in compliance with various state and federal laws. We can help you with the specifics for your situation (just give us a call), but this will give you a good idea of where to start.

Permits, Authority, and More… What Do I Need?

The various regulatory permits and registrations needed can vary quite a bit depending on which states you’ll be running through, but there are a few basics you’ll most likely need. Let’s take a look:

·         DOT Number

·         FMCSA MC Authority

·         Truck Registration

o   IRP

o   Unified Carrier Registration or UCR

o   IFTA (International Fuel Tax Agreement)

·         Individual State Permits- Some states require additional permits and fees. Things like oversize and overweight permits only apply if your specific load requires it, but some fees apply to even standard sized loads. For example you may encounter Weight Distance Taxes, fuel taxes that are paid to the state directly (and not charged with fuel), property taxes, and other required permits and fees.

Insurance… How Much Coverage Is Enough?

Although you may need higher limits, depending on your circumstances, the following coverages are most common for trucking and transportation:

·         $1 Million Commercial Auto Liability

o   $1,000 Deductible  for Physical Damage Coverage

·         $100,000 Motor Truck Cargo

o   $1,000 Deductible Non-Owned Trailer Coverage

The best way to determine how much insurance you need specifically is to talk with one of our agents. We aren’t just here to sell a policy, but to educate, inform, and help you in your journey. We want you to have access to the highest quality insurance products at highly competitive rates. We can help you determine what coverage you need and which insurer can best provide it.

Getting started in the transportation industry can be confusing, but don’t let that stop you. We’re here  to help you figure out what you need so you can… Travel with Care.

EOBRs: Coming Soon to a Truck Near You?

Bob Holtzman

 

Do you use an EOBR? It sounds like something out of a futuristic movie, but for many truck drivers an electronic on board recording device (EOBR) is simply part of their day to day, helping track hours of service, providing information to their employer about safety, and sometimes even offering navigational help. Since the devices first came to be, government agencies have been interested in using EOBR to improve safety records and cut down on violations.

 

What Are EOBRs?

 

Electronic on board recording devices (EOBR) aren’t a new technology at all. As early as 1990, the National Transportation Safety Board recommended the mandatory use of EOBRs on all heavy duty trucks. Since that time several attempts have been made to require these electronic log books for all commercial drivers although as of now these attempts have been largely unsuccessful and highly controversial.

 

If you aren’t familiar with the term EOBR, you might be more familiar with some of the other terms used to describe these devices. They may also be called ELDs (Electronic Logging Devices), e-logs, paperless logs, etc. The terms may be different, but deep down they are all basically the same devices.

 

Recent Proposed Regulations for EOBR

 

The latest big push for mandatory EOBR devices came this last March with the FMCSA proposing that ELDs be a requirement for interstate commercial bus and truck companies to improve HOS (hours of service) compliance. Speaking of the proposal Transportation Secretary Anthony Foxx said, “Today’s proposal will improve safety while helping businesses by cutting unnecessary paperwork – exactly the type of government streamlining President Obama called for in his State of the Union address… By leveraging innovative technology with Electronic Logging Devices, we have the opportunity to save lives and boost efficiency for both motor carriers and safety inspectors.”

 

The FMCSA believes that instituting electronic logs would reduce yearly fatalities by 20 and injuries by 434. Opponents to the proposed regulations fear that electronic logging could result in driver harassment and will lead to unnecessary expenses that won’t necessarily improve safety. The proposed devices would need to be integrated with the truck engine and be tamper resistant.

 

Electronic Logs: Will They Improve Safety?

 

While controversy remains over whether or not electronic logging devices are worth the investment, many large companies have chosen to adopt them voluntarily. For large organizations these devices can help companies stay on top of problems and provide better service to both their drivers and their customers. By using these logs to improve driver safety, companies can also reduce their insurance rates, often saving a substantial amount of money.

 

What do you think about electronic logs? Are you currently using them?

 

Occupational Accident- Who Will Pay Your Medical Bills If You Get Hurt On The Road?

Bob Holtzman

When you get hurt at work, Worker’s Comp comes to the rescue covering medical bills, rehab expenses and more. This important insurance coverage is paid for by your employer. However, in an industry like trucking where many are self-employed owner operators or lease operators, a work injury can prove disastrous. Who pays for your medical bills if you don’t qualify for Worker’s Comp and are hurt at work? How can you protect yourself and your family?

Worker’s Comp- How Does It Work?

Worker’s Compensation is a special state regulated program designed to protect employees and employers alike. Employers purchase work comp insurance which is used to pay for lost wages, medical care, etc. should an employee get hurt on the job.  That insurance  protectsemployers from lawsuits and provides for the injured employee and their family.

While Worker’s Comp policies are often required for employers, they are rarely required for self-employed people or independent contractors. This means a great number of truckers are unprotected when it comes to workplace injuries. Those looking at policies for themselves are often unable to obtain coverage or may find the rates to be out of budget.

Transportation inherently carries a lot of risks. You can be injured while tying down a load, slip and fall on icy pavement or fall while climbing in to your truck’s cab. Injuries can happen at jobsites, pick-ups or drop-offs and anywhere in between. Being on the road puts you at an increased risk for vehicular accidents. Just like any job, working in transportation has its risks. If you are an owner operator or a motor carrier with lease operators, you may want to consider purchasing an insurance policy to protect yourself.

Occupational Accident Coverage

While owner operators and lease operators often are unable to obtain Worker’s Comp insurance, they do still have options. One popular and affordable choice is occupational accident coverage. These policies often provide similar protection to a Worker’s Comp policy, but are available to those working for themselves or that have independent contractors working for them.

Every policy is different, but many occupational accident policies cover things like:

·         Accidental Death or Dismemberment

·         Survivor’s Benefits

·         Medical Expense Benefits

·         Disability Benefits (Temporary or Continuous)

·         And More.

We can help you find a policy that works for your situation and budget. Let our knowledgeable staff help you better protect yourself and your family. When accident strikes, we want you to be able to pay your medical expenses, bills and recovery costs.

If you get hurt on the job, are you protected? Let us help you find the occupational accident policy you need.

Will the Changes to Freight Broker Requirements Impact You?

Bob Holtzman

Brokers and freight forwarders play a valuable role in the transportation industry often acting as the go between for carriers and consumers. They match willing trucks with loads that need hauling and help get goods from one end of the country to the other. Since those doing the shipping are often unaware of the intricacies and difficulties involved in transportation, brokers and freight forwarders save carriers a lot of trouble by helping ensure everything is ready to go. As any busy trucker knows you don’t have time to spend hours on the phone; brokers and freight forwarders deal with the customer so you can focus on driving (and getting there safely).

The FMCSA recently made changes to the requirements for freight brokers. Will these changes have any impact on you?

Freight Brokers Must Hold $75,000 Surety Bond

Beginning Oct. 1, 2013 the amount of bond a freight broker must hold increases to $75,000, up from $10,000. This is a big increase and will primarily impact small and new brokers. Group surety bonds are not currently allowed, but the FMCSA may revise this after evaluation.

Definition of Broker Changed

Another big change is a change in wording redefining broker as a person that arranges the moving of freight for a fee. The new law specifically prohibits motor carriers from brokering loads unless they are registered brokers. If you arrange for loads to be moved, you must register as a broker, even if it’s just a few loads on the side. Enforcement for this provision might take time to develop as it is difficult to determine how many motor carriers also broker loads.

Motor carriers that want to register as brokers should file an OP-1 Form with the FMCSA. Include your US DOT number, but leave the MC number blank. The FMCSA issues a separate MC number for brokering authority.

Actionable Changes You Can Make

The new laws mean changes for the transportation industry. Here are a few changes you might want to make in accordance with the new laws:

  •  Avoid accepting loads from unregistered brokers.
  •  Register with the FMCSA as a broker if you currently broker loads.
  •  Increase your bond amount if you are a registered broker.

How Will These Changes Affect You?

The full results of this change are yet unknown. It may result in less brokering fraud since it will be more difficult to start up a new operation. Bond premiums will be higher and more difficult to obtain. Freight rates may also increase since the new bond requirements will be more expensive, thus pushing up the cost of transportation. This may also lead to less competition and fewer brokers, especially small brokers. With fewer small brokers large brokers may increase profits and decrease payouts to owner operators. Larger bonds will provide more protection for non-payment. Only time will reveal the full impact of these changes on those across the transportation industry. The one thing we do know however is that these changes will make an impact.

While the FMCSA’s recent changes primarily deal with freight brokers, they will have an effect on all involved in transportation. How do you see these changes impacting you?

Report Claims Quickly and Get the Most from Your Policy

Bob Holtzman

Crunch… it’s a sound no one likes to hear, especially when you’re driving a commercial vehicle.

Unfortunately, accidents do happen, even to the best drivers. In 2011 the FMCSA noted more than 5 million accidents reported to police with 273,000 involving large trucks. Safety can play a big role in helping you avoid these accidents, and when they do occur, knowing how to properly report your claim could be essential in getting you the most out of your truck insurance policy. When you have a claim make sure you report it quickly and thoroughly.

  Reporting a Claim- The Do’s and the Don’ts

  Do…

  ·         Get as Much Information as Possible– After an accident get as much information as possible. This will make it easier for your insurance company to figure out fault and ensure quick resolution of your case. Get as much information as you can from other drivers and passengers involved. Also make a note of any potential witnesses with their contact information.

  ·         Take Photos– A picture’s worth a thousand words, especially after a truck accident. Take pictures any damage (both vehicle and property), the accident scene (skid marks, vehicle positions, debris, etc.), the area where the accident occurred (road signs and markers) and any identifiers (license plates, insurance cards, etc.).

  ·         Contact the Police– While police may not come out to every accident scene, it is always a good idea to advise them of an accident, even if it seems minor.

  Don’t…

  ·         Delay– Report claims as soon as possible after an accident or event. Many truck insurance providers require that claims be reported within 24 hours or a higher deductible will apply. Having to pay double your deductible can greatly increase the cost of an accident. Save money by contacting us as soon as possible after an accident. We’ll help you deal with your insurance company.

  ·         Don’t Admit Fault– Never admit fault for accident, even if you think you might have caused it. Without understanding the complete picture behind the events, you don’t know whose fault an accident is. It’s possible that another driver was drinking or talking on the phone and is responsible. Don’t admit fault to other drivers or the police.

Do You Understand Your Policy?

  Every truck insurance policy is different, but understanding the details of yours is essential to getting the most out of your insurance, especially in an accident.  What’s your deductible? What are your requirements when reporting claims? If you don’t thoroughly understand your policy, take a few minutes and review it. The last thing you’ll want to deal with after an accident is trying to figure out your insurance coverage, although we’re happy to help if you need assistance.

Helping with claims is one of the many services we offer our customers here at Western Truck Insurance Services. We stay on top of your claim from the moment you report it to us, making sure you know what’s going on with your insurance company every step of the way. We only work with truck insurance providers that we trust and you can be sure that we’ll ask the right questions, get the best information and clearly relay any concerns to your insurance company. When we help you process claims you’ll know what’s happening, who’s handling what and how your needs are being met. Accidents are no fun, but with Western Truck Insurance Services by your side, they are a lot easier to handle.

  If it’s been awhile since you reviewed your coverage, give us a call. We can make sure your coverage is the best fit for your situation and give you a truck insurance quote for great coverage from some of the top truck insurance companies.

 

 

 

What Does the Future Hold for the Trucking Industry?

Bob Holtzman

With ever rising fuel prices, stagnant cargo rates and increasing regulation, you might be worried about the state of the trucking industry. Are you going to be able to earn enough to support your family? What does the future hold? While we don’t have a crystal ball and can’t predict the future, careful analysis of the industry can shed some light on what changes you can expect in the coming months.

A series of recent investment reports about the trucking industry by Stiefel provide some valuable insights into what you may see in the weeks ahead. Let’s take a look:

·         52% of Truckload Carriers Expect Volumes to Grow Over the Next 12 Months– Increased volume means more work for truckers and higher rates, a very good thing for the industry.

·         CSA Scores Matter-80% of those surveyed indicate that some of their clients care about the safety scores of their drivers. Safe driving will not only help you to impress with your CSA scores, but also obtain the lowest possible rates on your insurance.

·         Driver Turnover Expected to Increase– As the economy continues to recover the turnaround for drivers is expected to increase from 100% to 150%, the level where it was before the recession. Truck drivers tend to switch between industries and as construction and other industries need more workers, driver turnover is expected to increase.

·         Sleep Study Requirement Could Lead to Shortages– If the FMCSA’s proposed sleep study requirement for high BMI drivers passes, a real driver shortage could result. Half of commercial licensed drivers have a BMI over 30. Sleep testing costs as much as $5,000. Many truckers will likely switch industries rather than submit to the testing. Fewer drivers could mean more money for those that remain.

·         Environmental Regulations Have Biggest Impact on Owner Operators– Potential new EPA regulations for fuel mileage could have a big impact on owner operators and smaller fleets. Increasing mileage will require big equipment changes. Smaller operations generally purchase equipment that can do multiple jobs; efficiency requirements may lead to highly specialized equipment that can only do one or two jobs.

·         Increased Expenses– The newer more efficient engines require more frequent maintenance. 40% of fleets reported increased expenses with the new 2010 engines while only 10% noted a decrease.

·         More Owner Operators Expected– Currently half of those receiving operating authority from the government are owner operators. As lease agreements become less lucrative, people decide to go at it alone. Stiefel expects many more owner operators in the coming months.

·         Less Reliance on Brokers– Carriers are choosing to use freight brokers less often. Brokers are most commonly used by companies making less than $25 million annually.

·         ELogs Becoming More Common-ELogs are becoming more common. Currently 42% of larger fleets are using them compared with 12% of smaller fleets. Some drivers are choosing to leave the industry rather than comply with these logs since they unveil unsafe driving practices fairly effectively.

·         Driver Shortages May Get Worse– While unemployment rates still hover at about 7.5%, in the trucking industry there are shortages of workers and they are expected to get worse. Increased regulation may lead to more drivers leaving the industry. Overall there are shortages in many areas in the industry: safety people, mechanics, drivers, etc.

What do you predict will happen in the coming months for the trucking industry? How will these predictions impact the way you drive? While the industry is constantly changing, one thing will always remain the same: we strive to bring you the best rates on great insurance.

How Can I Improve My SMS and SAFER Scores?

Bob Holtzman

 

In our last blog post we talked a bit about SMS and SAFER scores. This month we’d like to take a deeper look at these scores and find ways to improve them. How can you reduce your scores? By better understanding your scores and taking a few simple precautions you can improve your ratings. At Western Truck Insurance Services we love helping you save money on your insurance and great safety scores might just save you a bundle.

 

Tips for Improving Your Scores

We want you to “Travel with Care” and a big part of this is safety. While improving your scores might help you save money on insurance, more importantly it will help you to become a safer driver, helping you to make home after those long hauls and ensuring that the roads are safe for all of us. Here are some tips for improving your scores and becoming a safer driver.

 

·         Buckle Up– With long hours on the road it is tempting to leave that seatbelt unbuckled, but this is one easy way to protect yourself. Buckle up as soon as you get into the truck. Make it a habit.

 

·         Hang Up– Cell phone violations are a big deal. Make a commitment to not use your phone while driving. Instead focus on the road. You can check your text messages and make important phone calls when you come to your next stop.

 

·         Inspect Yourself– Don’t wait for violations to be discovered at an inspection; inspect yourself. Periodically give yourself a mental inspection and see how you’d do. Are you log books up to date? Is your truck in good repair? Are you speeding? Finding your potential problems before an inspection will give you time to make the needed adjustments and become a safer driver.

 

·         Check Your Data– When was the last time you used DataQs to check your safety data? Just like you should regularly check your credit score, you should check your safety scores for errors too. If you find any inaccurate information, get it checked and amended.

 

·         Educate Yourself– Even the safest drivers can use a little reminder now and then. The FMCSA (Federal Motor Carrier Safety Administration) has created an online resource that commercial drivers can use to improve safety practices. Common driving errors are discussed with tips for improvement. Short video clips are available to further teach and train. This is a great resource for any commercial driver.

 

·         Make Safety a Priority– Inspections might catch violations, but if you’re doing everything you’re supposed to do these violations will be few and far between. Focus on safety, not on your scores. When you institute safe driving practices the scores will follow. Safety should be your first priority. It’s more important than getting a load to its destination on time or squeezing in a few extra miles in the day.

 

What are you going to do to improve your safety ratings? We encourage each driver to take a few minutes and renew their commitment to driving safely. SMS and SAFER scores might help you to remember the importance of safety, but even without these scores we want you to get there safe.

 

 

 

Protecting Your Business is Serious Business

Bob Holtzman

Work Related Accidents Impact…

  • You and your net worth
  • Your time and focus
  • The company you have built and its Stakeholders
  • Employees and their families
  • Lease Operators and their families

Risk Management is Mission Critical

  • What happens if an employee sustains a work-related injury or worse?
  • What happens if a lease operator sustains a work related injury or worse?
  • How is your exposure as a business owner different in each scenario?

Lease Operator

The Exposure…
The reality of occupational accident exposure is that if Lease Operators do not have coverage, then a serious injury will result in a claim made to the Motor Carrier’s workers compensation policy. Successful or not, you can count on the claim being made.

The Facts…
Occupational accidents and injuries can have devastating effects on an organization without proper protection.  If there’s enough money involved, personal injury lawyers will challenge the financial responsibility of all involved parties.  The related legal defense costs alone can severely impact operating profits and even drive many businesses into bankruptcy.  The coverage to reduce the exposure is both prudent and affordable.

What are the options?

Option #1:
Leave everyone exposed to a “parade of horribles.”

Option #2:
Agree that your lease operators are statutory employees and enroll them in your workers comp plan. This is the most expensive solution and may cause you to absorb the full onslaught of accompanying payroll taxes (perhaps even retroactively).

Option #3:
A Group Occupational Accident Plan for your lease operators allows you to pass through the related costs to them at a group rate, protecting them with 24/7, 48-state coverage, including survivor benefits, and defends your independent contractor agreement with them. Moreover, if you lose in a challenge by a court of law or workers comp review board, the Occupational Accident policy for the injured lease operator can be designed to convert to a ‘full blown’ workers comp policy and eliminate your company’s related contingent exposure.

Key GAIC Advantages for Lease Operators

  • Coverage limit issues, i.e., Plan A, B, C, or D;
  • Commencement Period
  1. GAIC gives 90 days to report a claim, treatment can begin when necessary
  2. Competing policies say treatment must begin in 90 days
  • Sub-limits: e.g., most competitors have $ 1,000 max limits for chiropractic care, ambulance or air flight, physical therapy, & other rehab treatment GAIC does not impose the sub-limit Accidents must be reported within 90 days, benefits can begin immediately upon reporting or at any time thereafter, and are not subject to a 90 day commencement period…and Accident benefits include dental where most competitors do not
  • When a $ 2mm CSL per occurrence aggregate for any one accident is selected, $ 1mm is set aside specifically for medical expenses, & $ 1mm for death, disability, & rehabilitation.
  • GAIC assigns a Nurse Care Manager to help insured deal w/ Psycho-Social issues
  • Temporary and Long-Term Disability Income benefit is based on Schedule C income and retro to day 1 (most competitors impose a 7 day grace period) and applies to the definition of “Under the course of doing business,” which includes maintenance, cleaning, & other misc activities…so coverage is not limited to just driving and loading/unloading
  • The $ 1mm maximum accident medical benefit is annual, not a lifetime one
  • Death benefits apply if death occurs within 2 years (instead of just 52 weeks) from the accident

Important Coverage Points for Fleets

  • Major point:  to keep personal injury attorneys away and adverse decisions from workers comp review boards, fleets need to offer the most broad occupational accident coverage available
  • GAIC does not impose Aggregate Limits on the Group Policy as do competitors…if a fleet has 100 drivers, each with $ 2mm Aggregate Limit, then GAIC’s exposure is $200mm.  A competitor will attempt to sell the same deal but put a $ 5mm or $ 10mm aggregate “stop loss” limit in
  • Average length of disability with GAIC is 29 days, which is 9 to 14 days shorter than before the Nurse Care Manager benefit was introduced.
  • Any expense not covered is a potential black hole liability
  • GAIC’s policy limits are generally higher than competitors
  1. Accidental death benefit pays $ 50K more ($ 300K vs $ 250K), i.e., the $ 2000/month survivor benefit pays for 125 months instead of just 100 months
  2. Accidental Dismemberment pays $50K more ($ 300K vs $ 250K)
  3. Paralysis benefit pays $50K more ($ 300K vs $ 250K)
  • Contingent Liability Feature available to the Motor Carrier as part of the Occupational Accident plan…it defends the lease agreement if a lease operator accident claimant attempts to claim employee status & collect workers comp benefits…and it defends the company in a Court of Law or in a Workers Compensation Review Board…if you lose, the contingent liability feature will pay up to statutory limits of a Workers Comp Policy

Need more information or help? Western Truck Insurance can answer all of your risk questions and help protect you and your business.

What is the Stated Amount of Physical Damage?

Bob Holtzman

Unlike private passenger type vehicles commercial trucking physical damage is often insured on a “stated amount” basis.

Physical damage premiums for private passenger type vehicles are ordinarily determined based on the original cost of the vehicle and its age.  This is practical largely because these vehicles depreciate in an easily predicted fashion.  Heavy commercial vehicles, however, are designed to outlast their engines.  Truck tractors, often traveling well in excess of 100,000 miles per year are designed to have their engines replaced regularly.  The value of the vehicle therefore is heavily dependent upon how recently the engine has been replaced.  A four year old tractor, for example, with a new engine, is worth considerably more than a similar four year old tractor with similar mileage and with its original engine.

Since it is more difficult to determine the worth of heavy commercial vehicles based on original cost and age, truck insurers have developed an alternative method, “Stated Amount” for providing physical damage coverage and determining premium.  The insured “states” the maximum vale of the vehicle and the premium is determined as a percentage of that value.  That percentage decreases as the deductible increases.

In general lower valued vehicles pay a higher premium percentage than more valuable vehicles because damage that would be a partial loss on a high valued vehicle could be a total loss on an older, lower valued vehicle.

The insured does not automatically receive the stated amount in the event of a loss.  The amount paid is always the least of three possible values:

  • The actual cash value of the vehicle at the time of the loss
  • The cost of repairing or replacing the vehicle with one of like kind and quality
  • The stated amount of insurance for the vehicle

Therefore the most that the insured could collect in the event of a total loss would be the stated amount.

On a stated amount basis truckers must value their vehicles in advance.  At each renewal the values must be reevaluated.  Automatic coverage is made more complex because of the need for timely vehicle valuations.  Professional underwriters will require insureds to justify in advance valuations that differ significantly from average expectations.  A little time spent resolving these issues when the vehicle is initially insured can avoid serious claims settlement problems following losses.

Truck insureds and truck claims adjusters, however, both favor the stated amount approach.  They like the idea of having an automatic cap on the value of the vehicle.  It makes claims settlement negotiations less contentious.  It is also easier and more accurate to compare competitive quotes on a percentage of value basis.

What is Physical Damage Insurance?

Bob Holtzman

Operators of commercial vehicles, such as truckers, need a number of insurance products.

Automobile Physical Damage insurance covers the damage to, disappearance, or destruction of actual automobiles and/or their equipment, such as tractors, trailers or semitrailers, trucks, or private passenger types of vehicles.  Equipment does not include personal effects (clothes, eyeglasses, etc.)

Covered autos are determined by designation symbols that must be tailored to whether the automobile that is to be insured is owned, rented, leased, hired, or borrowed and the type of vehicle.  Premiums usually depend upon the type and age of the vehicle, coverages chosen, garaging location, driver information, deductibles chosen, and loss experience

Such coverage is divided into two major components “collision” and “all perils other than collision.”   Collision covers striking another object (including other vehicles) and overturn of the vehicle.

“All perils other than collision” include loss by fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, falling objects, or the sinking, burning, collision or derailment of any conveyance transporting the auto.  These coverages can be purchased on an all inclusive or comprehensive basis, or a basis where each peril is specifically described (called named peril or limited specified causes of loss.)  In both cases there are some perils which are excluded from coverage.

Excluded perils for which no physical damage insurance coverage is ordinarily provided include nuclear hazards, war or military actions, organized racing or demolition contests, wear and tear, road damage to tires, and damage to most electronic equipment not required for the operation of the vehicle.

Although not mandated by law, like automobile liability insurance, physical damage is ordinarily required by financial institutions that loan money to purchase automobiles.  Since the automobile is used as collateral for the loan, the lender needs to make sure that the collateral remains unimpaired.  The insured’s own equity in his or her vehicle is also protected.

There are ordinarily separate deductibles for the “collision” and “other than collision” coverages.  Deductibles are the portion the insured must pay in the event of a loss.

The amount of coverage is ordinarily limited to the cost of repairing or replacing the damaged or stolen property or its value less depreciation.  If an insurer pays a physical damage claim that is the fault of someone else then the insurance company upon paying the physical damage claim assumes the right to recover the cost from whoever caused the claim.