Physical Damage Insurance: How to Set the Right Value

 

Don’t Guess the Value. Know It.

When your trucks are tied to your bottom line, damage doesn’t just mean dents and downtime, it means lost revenue. That’s where Physical Damage Coverage comes in. It pays to repair or replace your commercial vehicle after a covered loss, and it’s one of the smartest protections you can put in place.

But not all coverage is equal, and if your stated amount is off, you might be paying too much… or getting too little when it counts.

What Physical Damage Insurance Actually Covers

If your business uses trucks, vans, or service vehicles, Physical Damage insurance protects your equipment. It's not liability. It doesn't cover cargo. This is about your truck.

Two main parts:
- Collision Coverage: Pays when your vehicle hits another object (or gets hit).
- Comprehensive Coverage: Pays for non-collision events like theft, vandalism, fire, flood, hail, or animal strikes.

Why This Matters for Businesses

For truckers, your vehicle is your business. Without it, the work stops.

Physical Damage insurance keeps you rolling:
- Pays for repairs after an accident
- Covers replacement if your unit is totaled or stolen
- Helps avoid cash flow disasters

If you finance or lease your truck, most contracts require both. 

Collision vs. Comprehensive: What Each One Really Covers 

These cover damage to your own truck, but they work in different ways.

 Collision coverage pays when your truck hits something or gets hit. This includes crashes with other vehicles, backing into a pole, or rolling over. If there’s impact, it’s usually a collision claim—even if the other driver caused it.

 Comprehensive coverage pays when something other than a crash causes damage. It covers theft, fire, storms, hail, flood, vandalism, and animals. It also covers things like trees falling on your truck or someone breaking a window while you’re parked.

Collision is for wrecks. Comprehensive is for everything else. 

Stated Amount vs Actual Cash Value

When you write a commercial auto policy, you’re asked for a stated amount: the value of your vehicle based on its condition today. Think current fair market value -what could you sell it for today? 

After a claim, the insurance company compares your stated amount with the Actual Cash Value (ACV) and pays the lesser of the two.

How to Set an Accurate Stated Amount

- Use Truck Paper, NADA, or dealership appraisals
- Include special equipment, customizations, and rebuilds
- Get written estimates if needed
- Keep receipts and service records

Example: You insure a truck for $50,000. After a total loss, the ACV is $35,000. That’s what you get, minus the deductible!

Deductibles: What You Need to Know

- Higher deductibles = Lower premiums
- Lower deductibles = Less out-of-pocket at claim time
- Higher deductible usually applies if multiple coverages are triggered

Renting or Leasing Your Truck? This Part’s Critical

If you’re leasing or renting equipment, you’re usually responsible for your own Physical Damage insurance.

You must name the equipment provider as a loss payee to comply with the contract and ensure proper payout.

What’s a Loss Payee?

A loss payee is the party that gets paid first if your truck is totaled or stolen.

Why it matters:
- Incorrect or missing names can void coverage
- Always double check your lease or rental agreement

Parked Trucks Still Get Hit

Parked-truck damage is common:
- Hit while parked = comp
- Vandalized = comp
- Tree fell = comp
- Deer strike = comp

With truck parking shortages nationwide, comprehensive claims from parked trucks are increasing.

Why Cameras Are a Must-Have

- Protect against hit-and-runs
- Document vandalism or theft
- Prove who was at fault
- Speed up the claims process

Recommended setup: dash cam + side/rear cams + cloud storage

Add-Ons That Actually Matter

- Gap coverage
- Downtime coverage
- Rental reimbursement
- Electronic equipment
- Personal effects

Bottom Line

If your vehicle is tied to your business income, you need to protect it.

 -Set a realistic stated amount.
 -Know your deductible.
 -Don’t assume your lease covers damage.
 -Use cameras, it’s 2025.

 

Need help reviewing your setup? We’re here for that.
Email info@trucku.biz and we’ll tell you what’s missing.

Disclosure:

This post is for educational purposes only. It’s not legal advice, insurance advice, or a substitute for calling your agent. We’re good, but we’re not psychic. Policies vary, laws change, and courtrooms get weird. Don’t make decisions based solely on something you read on the internet, unless it’s from us, in writing, with your name on it. 

All opinions are our own and do not represent the views of any carrier, employer, or underwriting department that occasionally wishes we were quieter on LinkedIn.