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Does auto insurance cover the plow?

Discussion in 'Business Fundamentals' started by grec-o-face, Oct 27, 2009.

  1. grec-o-face

    grec-o-face Senior Member
    Messages: 485

    I've already called my insurance agent and I'm just waiting for a call back - but I figured I'd put my curb-feelers out and ask anyway...

    Does anyone's personal auto insurance cover the snow plow equipment?

    Plow? Sander? Whatever?
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Nope,you need commercial auto insurance .Unless it's for personal use.
  3. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    This is a "work in progress" so take it for what it's worth. Any comments are welcome.

    For plowing snow there are two main types of insurance that you’ll need - Commercial Vehicle and General Liability (CV and GL). In many states, your regular vehicle insurance will not cover a vehicle which is used for commercial purposes or “making money”. Legally (which is what I intend to discuss here - I am not going to get into “working under the table” or skirting the IRS rules) accepting anything for plowing snow constitutes “income”, whether it is money, beer or anything else.

    Commercial Vehicle insurance covers your truck in a manner similar to regular insurance. So caused by operating the truck will generally be paid out of this policy. Check your policy to make sure who is covered while operating a vehicle using commercial vehicle insurance. Some specific policies will only cover the business owner. Other operators need to be added individually to the policy. Be careful during the off-season because the same provisions still apply. Rates are set by the industry in which the vehicle is going to be used. Snowplowing is a very high risk operation and therefore the premiums are very high relative to other types of business. Since most people still use their truck in the off-season, they will list another industry so that the overall premium will be lower. What some do is list “landscaping” which has a lower rate. So half of the year you’re paying the snowplowing rate and the other half of the year were playing the landscaping rate for an overall lower rate than if you simply listed snowplowing.
    EXAMPLE - Snowplowing is $1000 per year and Landscaping is $500 per year. Half a year of each totals $750 per year.

    General Liability insurance is protection for what is called “Completed Activities” or the infamous “Slip and Fall”. GL comes into play once you have finished plowing and leave. Many new guys do not get this insurance because it is too expensive. They say they’ll get it later once they can “afford it”. This is a big mistake as it is in the learning stage that there is the biggest chance of a need for it. You will often read that subs do not need GL. This is also a mistake. If there is a lawsuit, the lawyer will list anyone involved and then it will be up to the judge or jury to decide who is and is not liable. Many commercial accounts and contractors for who you set up will want to be listed as “Additional Insured”. This is to assure them that you do actually have general liability insurance and that they get notified if the policy is modified or canceled. You should always request a copy of general liability insurance from those who subbed for you. This is requested through the insurance agent not the person who is subbing for you.

    There are three basic types of GL insurance - Residential, Commercial and Municipal.
    Residential - This is for those who plow mostly driveways. Some insurance companies will include small apartment buildings and small retail stores complexes (always clarify with your Underwriter).
    Commercial - As implied, this is for those who plow mainly retail stores and parking lots. The premium will be higher than Residential.
    Municipal - This is for those who plow roads and parking lots used by the general public.

    There are several examples of special cases that need to be discussed with your insurance agent and possibly clarified with the Underwriter. Just a few - Hospitals, schools and airports. I’d advise going over your policy every year. I once had the ok to bids schools (which were very rural) on a Residential policy. The next year all schools were excluded but I could plow any businesses on the same Residential policy as long as the NUMBER of business accounts did not exceed the number of driveways. I also found I couldn’t plow the PRIVATE road I’d been covered for several years.

    Many people will ask what others pay for their insurance to get an idea of what it will cost them. One has no relation to the other. Many factors go into setting rates. First is the geographical location in which you are located. Some companies will charge based on your proposed radius of operations, whether you have employees or subs and your scope of operations. Everything else being equal, insurance and Maine is much lower than in New Jersey. Other factors include your age, your insurance history of claims, your history in the industry, your financial status and even whether you own or rent. The only way to get an estimate of cost is to visit an insurance agent.

    My final comment is a caution when discussing coverage with an insurance agent. An insurance agent is not who will determine if a claim will be paid or not. That determination is made by the Underwriter, so any claim made by an agent has to be in writing and your policy or as an addendum. If it is not written down it did not happen. I have seen posts about claims were an agent said that you would be covered under a regular vehicle policy but just don’t say anything. My advice is to find a new agent. I have also seen where they say a regular vehicle policy would cover “just a few”. Again, my advice is “get it in writing” or find a new agent.
  4. trfrench

    trfrench Junior Member
    Messages: 24

    Thank you very much MICK for posting this. This is exactley what I have been searching for on here. I want to expand but have been hesitant to because of insurance. But I see no way around it, if I want to expand past doing family I have to get insurance. I just need to take the plunge I guess.
  5. dirtmandan2

    dirtmandan2 Senior Member
    Messages: 275

    i carry GL and comm plowing ( sorry for lack of actual ins. terms ) however I dont have a seperate policy , marine or whatever it is to actually cover the plows .. so if they get stolen or banged up in an accident I eat it...
  6. grec-o-face

    grec-o-face Senior Member
    Messages: 485

    So, what you guys are saying is... Commercial insurace will cover ME if I plow to "make money"
    Personal GL insurace will cover ME if I just plow for myself (not making money)

    will wither cover MY GEAR? My main concern is theft of equipment....

    Thanks Guys
  7. lilweeds

    lilweeds PlowSite.com Addict
    Messages: 1,178

    No you need a GL policy that covers equipment (few do), or an inland marine policy.
  8. hiii98

    hiii98 Member
    Messages: 63

    insurance question

    my insurance agent will sell me "Business Rated Vehicle
    Private passanger auto policy rated for buiness use" insurance. this is not the "Commercial Vehicle and General Liability"

    or maybe it is the same damn thing just with a different name. He claims he has several other snow plowers covered under this policy and it covers them from damaging anyone's property with their plow. The rates are really good and he said this is seperate from the "General Contractor's Liability" which is an addition cost on top of this insurance ($450 more)
  9. hiii98

    hiii98 Member
    Messages: 63

    also the insurance would cover me for either 25k in damages 50k personal or for $30 more a month 50k damages 100k personal...

    could i use this insurance to get bids on business lots ect?
  10. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Only way to know is to read the policy. We couldn't possibly tell you without reading the policy. Anyway, you're asking the wrong question (and you mean "give" bids; not "get" bids). First questions I would have are - "Does it list the use as "Snowplowing"?" and "Does this policy provide coverage for damages involving commercial facilities?"
  11. suzuki0702

    suzuki0702 Senior Member
    Messages: 649

    you dont need to be giving bids to anyone if you cant afford the right insurance. go get the right stuff and be done with it...its people like you that give us a bad name! when you damage somebodys building for 75k and your ins. doesnt cover it your going to have to!
  12. hiii98

    hiii98 Member
    Messages: 63

    why would you damage someones building for 75k you'd have to be a real ******* to do that! lol then again this field sure is full of geniues i'm sure...

    its people like me who give you a bad name?!?... people who ask about buying business plowing insurance?? ...whatta jerk i must be for asking.:rolleyes:
    Last edited: Nov 9, 2009
  13. AC2717

    AC2717 Senior Member
    Messages: 690

    Mick has hit it on the head for the most part
  14. mcwlandscaping

    mcwlandscaping 2000 Club Member
    Messages: 2,557

    That really isn't all that much....if you hurt someone, and you don't have enough coverage YOU will be paying for a long long time and medical anything isn't cheap! A year and a half ago when I realized i was getting pretty serious into this (I'm only 19) I went to my insurance agent (auto) and asked what i could do to bump up my policy. I bumped everything (injury, damages, accidents, etc.) everything everything to $1 mil, barely changed my annual rate as it moved me to a different class of insurance....TOTALLY worth it.

    My GL is $1 mil as well for one incident, $2 mil total possible claims for the year (that covers all sorts of stuff that is POLICY SPECIFIC, so check what your buying)....just knowing that i'm sitting on real good insurance helps me sleep A LOT better at night and does look good when submitting bids.

    And as others said, Mick's post was what you definitely need to understand!
  15. hiii98

    hiii98 Member
    Messages: 63

    that bug in your signature is creeping me out! I keep trying to smash it lol. Thanks for the info Mike. I'm going to stick with my Business Insurance Policy all the local plowers here are covered under the same policy. 100k in personal liability and 50k in damages to property or vehicles... should cover me. entire policy cost $310 or so for 6 months.
  16. suzuki0702

    suzuki0702 Senior Member
    Messages: 649

    ya people like you that think their coverage is sufficient. which its not ...do me a favor tell me where your plowing so i can go slip and break my hip! u can count on a lawsuit!! not trying to be a jerk. if your going to do this. be legit!
  17. hiii98

    hiii98 Member
    Messages: 63

    thats why my contracts specifically states that i cannot be held responsible by the owner of the lot for slips and falls, as signed by the lot owner. The insurance does however cover me from smashing into other cars parked, gouging up the lot, chopping up bushes, or hitting other objects. I feel covered for 50k. Plus i feel that i saved about $800.00, and i'm a one man crew.
  18. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    "Hold Harmless" clauses will not protect you from lawsuits. They are simply something you can present to the judge to consider. It is not the property owner on the hook here - it's his insurance company. The insurance company did not sign your contract and they WILL sue you. The property owner can not sign away the insurance company's right to sue.
  19. hiii98

    hiii98 Member
    Messages: 63

    Good point Mick, hadnt considered that angle.
  20. AC2717

    AC2717 Senior Member
    Messages: 690

    Mick is absolutley correct