Commercial Auto Insurance

Commercial auto insurance is a requirement for any business that uses vehicles for work purposes, even if the employee is using their own vehicle for business use. It is a legal requirement for citizens to have personal auto insurance for any vehicle they own but many people don’t know that in most states it is also a legal necessity to have commercial auto insurance if they will be using their personal vehicle for work purposes. This is because most personal insurance policies will not cover citizens for commercial vehicle use on the same policy. However, even if you do have commercial auto insurance, and a vehicle is stolen or damaged, then you still may have costs if your coverage is not extensive enough. Some people may believe that their ‘business owners insurance’ covers vehicles in their ownership but this is often not the case.

Your commercial auto insurance can work on a vehicle by vehicle basis, meaning a separate policy for each vehicle that your business owns, and the driver who operates it. However, most policies work on the basis of how many vehicles your business will be using and the number of drivers who will be operating them. Fleet policies such as this aim to be respectively cheaper than individual policies, although the prices vary vastly according to the vehicle size and also the type of vehicle you will be using. The general rule is; the more expensive the vehicle, the more expensive the policy so keep this is mind when deciding what vehicles to purchase/lease for your business. An expensive vehicle may look good when visiting clients and give the impression of success but they come with many more costs such as the commercial auto insurance policy rates and higher fuel consumption.

Safety is a major consideration for business auto insurance providers so vehicles with a high safety rating will have a lower premium, as they will be better able to withstand an impact. Devices that improve the security of your vehicle such as car alarms or vehicle tracking are well worth the money, as the expected premium saving should go a long way toward paying for the device. Consideration needs to be given to the physical location that your company vehicles will be stored in overnight, as this will more than likely be a question the auto insurance provider will ask. Parking on an unlit side street is unfavorable compared to a locked garage as there is a ‘theft premium’ included in a commercial auto insurance policy. Your driver’s previous driving record will also have an effect on the premium charged because safer drivers will be better rewarded by a lower premium. Another thing to consider is the deductible that your company can afford (the premium that is payable by your company upon making an insurance claim), as a higher deductible will mean a lower premium.

Your commercial auto insurance policy needs to be read very carefully because a ‘definition’ of commercial use will be included in this, meaning you only have coverage if you are using your vehicle between these parameters. Make sure that you discuss the exact nature of your business and commercial need for vehicle use with commercial auto insurance providers so that they can quote, and subsequently provide a policy, that does not restrict you in the day to day running of your fleet but allows you to operate freely in the knowledge that you have coverage.