Commercial Auto Rating and ACORD Classifications

Commercial Auto Rating and ACORD Classifications

For insurance rating purposes, insurance companies categorize automobiles into different classifications. The first step is to distinguish between “commercial” and “personal” automobiles. From there, vehicles are further classified by weight, type, use, and other factors adopted by different insurance companies and dependent upon state laws.

In order to simplify the Commercial Auto Rating process, certain standardized practices have been widely accepted in the insurance industry in order to simplify policy rating for commercial autos.

A numeric system has been adopted to dictate how a commercial auto policy might extend coverage to vehicles in a business’s fleet. This system has become part of the widely accepted ACORD application forms developed by the Association for Cooperative Operations Research, an insurance standards association.

The nine standard ACORD covered auto symbol classifications

  1. Symbol 1 — Any auto:This means the insurance application will apply to any vehicle used by the business, regardless of ownership.
  2. Symbol 2 — All owned autos:The insurance on the application will apply to all vehicles owned by the business, and is helpful for businesses possessing large fleets that are likely to gain and lose vehicles on a regular basis.
  3. Symbol 3 – Owned private passenger autos:This is a limited subset of coverage provided by Symbol 2 and is useful for businesses with fleets that include many different types of vehicles. Use Symbol 3 to limit policy coverage to smaller passenger vehicles, as opposed to larger work trucks or other vehicles.
  4. Symbol 4 – Owned (other than private passenger):Provides coverage to all vehicles owned by a business except private passenger vehicles. Primarily for larger working vehicles like dump trucks, tow trucks or heavier vans used to transport equipment.
  5. Symbol 5 — Vehicles requiring No Fault Coverage:Applies only in no-fault insurance states.
  6. Symbol 6 — Autos subject to compulsory uninsured motorist laws:Some states require vehicles to carry a minimum amount of Uninsured Motorist coverage.
  7. Symbol 7 — Autos specified “On Schedule”:If the application is accepted, the commercial auto policy will extend coverage to vehicles specifically listed on the policy.
  8. Symbol 8 — Hired autos:Extends coverage to any un-owned vehicles a business hires for work purposes, includes taxis, delivery vehicles or catering trucks.
  9. Symbol 9 — Non owned autos:Extends coverage to non-owned autos and is commonly used to insure against liability issues that might arise when employees cause an accident driving their own vehicles on company business.

A Commercial Auto Rating system will determine rates primarily based on these classifications.