Understanding Commercial Auto Symbols
In the world of commercial insurance, the Business Auto Coverage Form (BACF) uses a system of numeric symbols (1 through 9) to define exactly which vehicles are covered for specific types of protection. These symbols act as a shorthand for the policy, determining the scope of coverage for liability, physical damage, and other endorsements.
For candidates preparing for the complete Commercial exam guide, mastering these symbols is essential. They are one of the most frequently tested areas in the Property & Casualty exam because they dictate the exposure and risk level of the insured entity. Incorrectly applying a symbol can leave a business with significant coverage gaps.
Symbol 1: Any Auto
Symbol 1 is the broadest designation available in the BACF. When Symbol 1 is used, coverage applies to any auto, including those owned by the insured, hired or leased vehicles, and non-owned vehicles used for business purposes. Because of its extreme breadth, Symbol 1 is almost exclusively used for Liability Coverage.
Using Symbol 1 ensures that the business is protected regardless of how the vehicle was acquired or who owns it, provided it is being used for the business. It eliminates the need to report every newly acquired vehicle to the insurer for liability purposes during the policy period.
Comparison of Owned Auto Symbols (2, 3, 4)
| Feature | Symbol | Definition | Common Use |
|---|---|---|---|
| Symbol 2 | Owned Autos Only | Used for all coverages (Liability, Physical Damage) for any vehicle the business owns. | |
| Symbol 3 | Owned Private Passenger Autos Only | Restricts coverage to 'cars' (sedans, SUVs); excludes trucks or heavy equipment. | |
| Symbol 4 | Owned Autos Other Than Private Passenger | Used for commercial trucks, trailers, and vans not classified as private passenger. |
Symbols 5 and 6: Statutory Coverages
Symbols 5 and 6 are specific to legal requirements in various jurisdictions:
- Symbol 5 (Owned Autos Subject to No-Fault): This symbol is used for vehicles required to have Personal Injury Protection (PIP) or other 'no-fault' benefits in specific states.
- Symbol 6 (Owned Autos Subject to Compulsory Uninsured Motorists Law): This is used for autos in states where Uninsured Motorists (UM) coverage is mandatory and cannot be rejected by the insured.
Exam Tip: Symbol 7 Limitations
Symbol 7 (Specifically Described Autos) is the most restrictive symbol. Coverage only applies to the specific vehicles listed in the policy declarations. For newly acquired vehicles to be covered under Symbol 7, the insurer must already cover all vehicles owned by the insured, and the insured must notify the insurer within 30 days of acquisition.
Symbols 8 and 9: Hired and Non-Owned
These symbols are critical for businesses that do not own a fleet but still face auto-related liability:
- Symbol 8 (Hired Autos Only): Applies to vehicles the insured leases, hires, rents, or borrows. Note that this excludes vehicles borrowed from employees or family members.
- Symbol 9 (Non-Owned Autos Only): Covers vehicles the business does not own, lease, or hire, but which are used in connection with the business. This most commonly applies to employees using their personal cars for work errands.
On the exam, remember that Symbol 1 includes the exposures of Symbols 8 and 9 automatically, but smaller businesses may only purchase 8 and 9 to save on premium costs. You can practice identifying these scenarios with our practice Commercial questions.
Symbol Quick Reference
Frequently Asked Questions
Technically, insurers rarely allow Symbol 1 for Physical Damage (Comprehensive or Collision) because it would provide open-ended coverage for any vehicle without the insurer knowing its value. Symbol 1 is almost always reserved for Liability.
Symbol 2 covers all owned autos, including those acquired during the policy period, without needing immediate notification. Symbol 7 only covers vehicles specifically listed in the schedule and has a strict 30-day reporting requirement for new additions.
No. Symbol 9 provides Liability coverage for the Employer if the employee has an accident while working. It does not provide Physical Damage coverage for the employee's personal vehicle; the employee must carry their own personal auto insurance for that.
Symbol 8 (Hired Autos Only) is the correct designation for vehicles leased, hired, rented, or borrowed by the business.