Looking for a way to reduce Auto insurance costs during the hard market? Consider Specified Causes of Loss.

There are three types of physical damage coverage for a “covered auto” – whether that is owned, hired, etc. The coverages are Collision; Comprehensive; and Specified Causes of Loss – an alternative to Comprehensive.

Specified Causes of Loss, or SCOL, is just what it sounds like, loss caused by a peril listed in the policy. It can be thought of as Named Perils (Basic or Broad Form for Property) versus Open Perils (Special Form). In the ISO Auto policy, Comprehensive covers any cause except for a list of exclusions. SCOL covers:

            Fire, lightning or explosion

            Theft

            Windstorm, hail or earthquake

            Flood

            Mischief or vandalism

            Sinking, burning, collision or derailment of any conveyance transporting the covered auto

The specified causes are broad enough to cover most non-collision losses. There are notable exceptions that would not be covered under SCOL, such as animal damage or rock strikes on windshields. Full glass is not provided.

Either SCOL or Comprehensive must be chosen for each scheduled auto – not both. Towing and Transportation expense can both be covered along with SCOL, although some carriers have rules against using Towing and Transport without Comp.

Garage policies use this type of coverage much more often than everyday Business Auto, which makes sense when considering that autos in the Garage’s control are unlikely to leave the premises. Even when they do leave, it’s not for long.

Coverage for Specified Causes of Loss usually has a significantly lower rate than Comprehensive. Using this unsung coverage may help cut your prospect’s Auto expenses, without sacrificing much coverage. For businesses able to absorb the cost of an occasional broken windshield or unusual event, it is an option. Just be sure the businessowner understands the exchange of reduced coverage for reduced premium.