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Commercial Auto Insurance

Wednesday, July 26, 2023
Commercial Auto Insurance

Commercial auto insurance is a type of business insurance that covers vehicles owned by or used by your company. It shields it from liability for losses brought on by accidents involving these vehicles and offers specific compensation to passengers who are hurt while riding in these vehicles. When you and your staff use a company-owned vehicle, a hired vehicle, or a personal vehicle to conduct business, a commercial auto insurance policy can provide important financial protection. It’s important to be aware that a personal auto insurance policy frequently excludes coverage for vehicles used for business purposes.

What Is Commercial Auto Insurance?

Commercial auto insurance offers a range of coverage options for automobiles, trucks, vans, and other vehicles utilized by your company.

The following situations call for a business auto insurance policy:

  • The car is a company vehicle that is used solely for business purposes.
  • The business owns the van or truck.
  • Your vehicle is used to perform a professional service.
  • In a company vehicle, you transport tools or equipment.
  • You need liability insurance with high limits.
  • You use your car, van, or truck to transport people or objects for work.
  • Your employees travel in company vehicles.

What does commercial auto insurance cover?

Despite being similar to personal auto insurance, commercial auto insurance has different eligibility requirements, coverage, exclusions, and limits. Commercial auto insurance policies typically offer higher liability limits than personal auto insurance policies.

  1. Comprehensive insurance: Compensates for damage to your car that results from sources other than accidents. Theft, floods, vandalism, earthquakes, fires, damage from birds or animals, and theft are some of these causes.
  2. Liability insurance: If you cause an accident, this insurance will pay for any property damage to another vehicle and injuries to others. If a lawsuit is filed against you due to an accident, the bodily injury will cover your legal costs, medical bills, and lost wages of others.
  3. Collision insurance: Regardless of who is at fault, pay for damage to your car if you hit another car, another car hits you, or your car rolls over. Collision coverage might be necessary if you have a loan or lease on your car.
  4. Uninsured motorist coverage: If you are struck by an uninsured or, in some states, an unidentified driver, pays for your medical bills or any property damage.
  5. Underinsured motorist coverage: Unless you reside in a no-fault state, where each driver’s auto insurance policy responds to their losses, it protects you if the at-fault driver does not have sufficient liability insurance to pay your bills.

What Is Not Covered?

An insurance policy for commercial vehicles excludes coverage for the following situations:

  • Health-related costs are unrelated to an incident while an employee was operating a company vehicle.
  • Things inside your company car that were harmed in an accident.
  • Accidents take place when a worker uses a personal vehicle for non-work-related purposes. Hired and non-owned auto insurance coverage is available to you for this.
  • Repairs to the rental car you or your staff used while your company car was being fixed after an accident. Hired and non-owned auto insurance can be added to your policy if your company requires this level of protection.

Why is commercial auto insurance important?

Suppose you or a worker needs medical attention or incur legal costs due to an auto accident. In that case, you can rely on commercial auto insurance for your financial security. If you don’t have commercial vehicle insurance, your company will be responsible for paying any medical expenses and expensive legal costs.

Even if it’s not required, business auto insurance is still a wise decision. You might have to pay thousands of dollars in medical and other expenses if you don’t have it.

The following companies frequently buy commercial auto insurance:

  • Obtain a vehicle with a business title.
  • Drive between work sites.
  • Carry work-related supplies, tools, or products.
  • Transporting customers or staff
  • Rely on couriers or delivery personnel.

How much does commercial auto insurance cost?

Monthly premiums for commercial auto insurance are typically $147.

Cost is determined by several factors, such as:

  • Number of automobiles
  • Vehicle type and cost
  • Risk level that is present
  • History of claims
  • Records of employee driving
  • Policy limits and deductibles

What Types of Vehicles Are Covered?

The following types of vehicles are covered:

Who needs commercial auto insurance?

Different industries that use commercial vehicles gain from having commercial auto insurance. It is made for companies and independent contractors needing a company car to run their business.

The following are some particular professions that require commercial auto coverage options more frequently than others:

  • Cleaning
  • Landscaping
  • Construction and installation
  • Consulting Insurance
  • Beauty Shop Insurance
  • Retail Insurance
  • Technology Insurance
  • Photography Insurance
  • Restaurant Insurance

Do I Need Commercial Auto Insurance?

If your company uses any company vehicles, most states require you to have commercial auto insurance. You should consult your state’s laws to determine the type of insurance your company needs. If your company is one of the following:

  • Possessing, renting, or leasing automobiles and trucks
  • Some of your employees use their vehicles for work.
  • Employees who use company vehicles that are leased, rented, or owned

Tips for Buying Commercial Auto Insurance

If you’re looking for commercial auto insurance, use these tips:

  1. To protect the assets that could be taken from you in a lawsuit if there is an accident and you are sued, make sure you have enough commercial auto insurance coverage. As an illustration, you likely want to purchase liability coverage above the legal minimum in your state. According to Nationwide, every vehicle should have liability insurance that is at least $500,000.
  2. Make use of an insurance agent without holding back. An agent can assist you in choosing the best policy for your company, which may include particular commercial auto coverage for your work.
  3. If someone hits you who doesn’t have liability insurance or doesn’t have enough liability insurance, pay for your medical bills and the medical bills of your passengers.
  4. Spend time investigating the insurance provider you are considering for your commercial auto insurance. Do not solely rely on cost. You should evaluate various companies’ reputations and compare the offered coverages.

Other common questions about commercial auto insurance

Q. What Is the Difference Between a Commercial and Personal Auto Insurance?

A. If you or one of your employees uses a company vehicle for work-related purposes, you must have commercial auto insurance. Personal auto insurance is required when you or a family member uses your car for travel, such as getting to and from work. Commercial auto insurance typically provides higher limits and liability protection than personal auto insurance.

Q. Is Personal Use Covered by a Commercial Policy?

A. Generally speaking, a commercial policy will cover the personal use of a company vehicle. However, many times family members do not receive certain coverage. If you require additional coverage for family use, speak with your agent.

Q. How Do I Purchase Commercial Auto Insurance?

A. Through a private insurance agent, you can buy commercial auto insurance. They’ll take the time to learn about your company’s operations and vehicle usage to find the best coverage at a reasonable cost. In the event of an incident, your agent will also help you navigate the claims procedure.

It may be easier to ensure your company has the best protection possible and that you are paying for something other than duplicative coverage if you use the same agent for all your business insurance.



Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.