An uninsured driver hits the vehicle of an agent’s commercial client. In addition to totaling the van, the accident causes damage to the client’s tools and equipment.

Q: The uninsured motorist carrier is denying coverage for the tools and equipment on the basis that it is not part of the vehicle. I do not believe this is correct in my state, Washington. What do you think? 

Response 1: States differ on coverage requirements and language. Always look for the state-specific rules, statutes and policy language. In terms of the best way to cover these tools, never depend on coverage forms that are not intended to provide the specifically required coverage, such as an inland marine policy. 

Response 2: Unless you covered the tools under a tool floater, the carrier is correct to deny coverage. Tools are not covered under a commercial package policy, either, because they are usually located more than 100 feet from the described premises. This is a very common oversight among agents.

In the future, consider going over a checklist with both large and small commercial clients, and make sure they sign off on that information to acknowledge that they rejected coverage. Many clients elect to self-insure due little coverage requirements in the contract language.

Response 3: Uninsured motorist property damage coverage often excludes damage to personal property in the vehicle. This coverage can be state-specific. 

Response 4: UM coverage is state-specific, and most states don't include any coverage for damage to property. In those that do, the coverage is specific to state law. State-specific coverage forms disclose the scope of coverage.

Response 5: Most of the Washington-specific UMPD endorsements I've seen include all property, not just the vehicle, in the description of what's insured. 

Response 6: Unlike many states that specify bodily injury only, the Washington UM law does allow coverage for property damage. But the following section seems to preclude property such as tools and equipment, unless your insured's policy specifically covers them: “Property damage coverage required under subsection (2) of this section shall mean physical damage to the insured motor vehicle unless the policy specifically provides coverage for the contents thereof or other forms of property damage.”

If the policy specifically covers tools, good for you. If not, I have to agree with the insurer. Keep in mind, too, that when collecting through their own policy under these circumstances, your insured effectively becomes a third-party claimant—and thus somewhat adversarial—against their own insurer.

Response 7: The answer lies in your UM statute and should be spelled out in the UM section of the policy or the UM endorsement.

Response 8: Your client should have an inland marine floater for damage to their tools. Typically, UMPD applies to the damaged vehicle, not its contents.

Response 9: If the insured has the PP 04 81 10 15 attached to the policy, the definition of "property damage" reads as follows: “‘Property damage’ as used in this endorsement means injury to or destruction of the property of an ‘insured’.” There is no limitation on the type of property. The carrier must specifically identify the property that is excluded. It doesn't say anything about the auto—just property.

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