The three types of physical damage coverage for motor vehicles are collision, comprehensive and specified perils.

• Collision coverage is for losses that result from the collision of a covered vehicle with any object or from the vehicle overturning.

• Comprehensive coverage is the broadest form of auto physical damage coverage, because it provides for losses from any cause except collision and overturn (insured under collision coverage) and a few policy exclusions, such as wear and tear, mechanical breakdown, and acts of war. Among the causes of loss covered under comprehensive are flood, fire, theft, glass breakage, falling objects, explosion, earthquake or colliding with a wild bird or animal.

• Specified perils coverage covers many of the same perils as comprehensive, but because it covers only named perils, those specifically named in the policy; it has a lower premium. It is sometimes referred to as fire, theft, and Combined Additional Coverage (CAC).

If your businesses has a large fleet of vehicles, over time, it may be more costly to insure the fleet for physical damage than it is to retain the risk, that is, pay for any physical damage directly rather than by insurance.

Regardless of how many vehicles your business has, it may be cost effective to carry physical damage coverage only on the newer or more valuable vehicles.