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Commercial Auto Insurance

Commercial Auto Insurance Explained

Commercial car insurance is specifically engineered for vehicles used for the operation of a business. It helps protect the policyholder from many liability issues and from costly repair or vehicle replacement should a commercial vehicle be damaged or destroyed.

Who does it serve?

Good commercial auto insurance can be tailored to all kinds of businesses that require vehicles in their operations. Not only is it legally mandated, it is greatly beneficial for the business owner to help avoid unnecessary legal, medical, or repair expenses. Large and smaller businesses greatly benefit from having this type of policy coverage.

How it works

The business auto policy is pretty similar to personal car insurance. As in usual car insurance, the customer will need to first determine what coverage levels and types they need and how much their budgets will allow. Keep in mind that it is wise to not shortchange one’s self when it comes to the protection of his or her livelihood. Once the policy type is determined, the business owner may then purchase the policy of choice. The insurance company then provides the company an agreement to sign and, once accomplished, coverage begins. Policyholders then simply pay the premiums on time. Once a claim needs to be filed, the company is contacted and assistance and instructions on how to proceed are provided.

Types of coverage

There are two main kinds of coverage of commercial auto insurance. The most common is “per vehicle insurance”, which is usually purchased by small to medium sized firms. Larger companies will normally find it to be more beneficial and cost-effective to buy what is known as “fleet insurance.” A fleet insurance policy is a more comprehensive and simultaneous form of coverage for all the vehicles and drivers at a company. Per vehicle insurance means a policy must be obtained for each vehicle used in the operation of the business. All of the employees that use that particular car must also carry this coverage.

Examples of different coverage for different needs include vehicles that are utilized to transport passengers as opposed to those that may require different levels of coverage when, for instance, they are used to move merchandise. Also keep in mind that most states will mandate minimum liability coverage that compensates for damages the policyholder causes to others, such as vehicle repairs, personal property damages, medical bills and more. Liability does not, however, cover repairs or replacements to the policyholder’s (company’s) own vehicle(s).
To extend coverage protection, a company can buy comprehensive commercial auto coverage. This is what can compensate a business for damages to the commercial vehicle, regardless of fault and for instances of theft and vandalism. Additional optional coverage may be bought to for rental car provision if the commercial vehicle is not available due to being at the mechanic’s shop.
How much one will spend on a commercial auto policy will vary depending on many factors. For instance, the kind of service vehicles that are being covered, where the business is operated and who operates the vehicles will all have an effect on rates.
Remember that discounts and deals are possible on commercial auto policies, so be sure to investigate what’s available with the many different insurance providers. By buying the proper commercial car policy, you will be comforted in knowing that, in addition to being in compliance with state law, your company will also be protected from other forms of financial loss and damages.