How Commercial Auto Insurance Works – Forbes Advisor
Commercial auto insurance protects the cars, trucks and vans you use when you conduct business. Whether your business fleet is large or small, you’ll need to insure the vehicles you use for business purposes.
Commercial vehicles can include company cars and commercial trucks and vans. box trucks and food trucks are other examples of vehicles that may be covered by commercial auto insurance.
what is commercial auto insurance?
Commercial auto insurance policies cover insurance amounts and usage that will not be covered by your personal auto insurance policy.
If you drive a car for business and get into an accident, your personal insurance company will not pay the claim.
Here are scenarios when you need a business auto insurance policy:
- the car is used for work only and is a company car
- transports goods or people in your car, van or truck to work
- performs a commercial service with your vehicle
- transports tools or equipment in a commercial vehicle
- your employees drive a commercial vehicle
- the truck or van is owned by the company
- need high liability insurance limits
- bodily injury liability pays for injuries you cause to another person.
- Property Damage Liability pays if your vehicle damages someone else’s property and you are legally responsible. As with bodily injury liability, property damage liability also pays for your legal defense if you are sued for the incident.
- Combined Single Limit (CSL) insurance provides one overall limit for bodily injury and property damage claims against you instead of two separate limits.
- medical payments and personal injury protection (pip) pays medical expenses for you and the passengers in your car as a result of an accident covered by the policy. pip required in no-fault insurance states.
- Collision insurance pays for damage to your own vehicle when it hits or is hit by another car or object.
- comprehensive insurance will pay for damage to your vehicle due to fire, flood, theft, vandalism and other specific problems.
- Uninsured Motorist (UM) coverage pays for injuries to you or your passengers if you are hit by an uninsured driver or someone who has auto insurance but not enough to cover everyone. your medical expenses. bills. In some states, you can also purchase um coverage that pays for damage to your vehicle caused by an uninsured driver.
related: the best commercial auto insurance companies
what does commercial auto insurance cover?
Just like a personal auto insurance policy, commercial auto insurance provides coverage for things like liability, collision, comprehensive, medical payments, personal injury protection, and uninsured motorists.
But commercial auto insurance is different in who is eligible, coverage, exclusions, and limits.
This is what a commercial auto policy can offer:
insurance for tools and equipment in a commercial vehicle
Loose tools and equipment in a commercial truck or van are not covered by commercial auto insurance because they are not considered part of the car. tools and equipment may be covered for theft and damage under a commercial property insurance policy.
who is covered by commercial auto insurance?
A commercial auto insurance policy covers company employees, family members, and others such as drivers. if someone regularly drives a commercial vehicle, it should be added to the commercial auto insurance policy.
what is rented car insurance and not your own?
A commercial auto insurance policy will not cover personal vehicles or rental vehicles you use for work. But if you rent your work vehicle or if employees sometimes use their personal cars to run errands at work, consider “rental car insurance not owned.”
This coverage pays for liability claims against your company that involve a vehicle the company does not own. For example, if an employee causes an accident on the way to work, the victims could sue their company. rented and not owned car insurance covers these situations.
farmers launches usage-based commercial auto insurance
farmers insurance has launched a new usage-based commercial auto insurance, fairmile, in washington state. With the fairmile program, business owners will have the opportunity to choose the price of insurance per mile. this could be especially helpful for small business owners who don’t use their work vehicles frequently or only seasonally.
With fairmile, the premium is based on the actual miles traveled in each commercial vehicle. Each month, premium adjustments are made to reflect actual miles driven.
customers who choose to enroll in fairmile will receive a telematics supplement for each of their commercial vehicles. the fairmile program also includes the fairmile app, which contains mileage reports, detailed trip summaries, and other data for drivers.
In a survey of their commercial insurance customers, farmers found that 33% were likely to use telematics and 75% said they would likely use telematics if it meant additional savings on their insurance policy.
tips for buying business auto insurance
in the commercial auto insurance market? Here are some buying tips from Dave Hynek, General Manager of Commercial Lines Marketing at Insurance Acuity.
Get enough coverage. Make sure you have enough commercial auto insurance coverage to protect what you stand to lose if there is an accident lawsuit against your business.
“First, you’ll want to make sure your policy covers the full extent of your exposure to protect yourself and your business; this includes limits and coverages,” says hynek.
Talk to an agent. Don’t hesitate to ask for help from an insurance agent. An agent can help you identify the right policy for your business, Hynek says, including commercial auto coverage specific to the type of work you do.
add uninsured or underinsured motorist coverage. don’t overlook this coverage in a commercial auto policy.
“Uninsured and underinsured coverage helps you pay for damages caused by a driver who doesn’t have auto insurance or has insufficient limits. If you are injured or your truck is damaged in a crash caused by such a driver, this coverage will help pay the costs, up to your policy limits,” says hynek.
Research the insurance company. Take the time to do some research on the insurance company you have in mind for your business auto insurance.
“Many business owners make the mistake of thinking that all insurance companies are the same and only focus on price. while price is certainly part of the equation, business owners should check out independent surveys or online review sites to see how well they perform when it counts,” says hynek.