Irrespective of the scale of business you run, if there are automobiles involved, you need commercial auto insurance. Note that these insurance covers are designed for both large and small vehicles used in businesses. Any vehicle owned by a business and is driven by the employee or owner can be covered under this insurance policy.
In the United States, most states mandate business owners with vehicles to carry liability coverage and some states also make personal injury protection and uninsured/underinsured motorist coverage compulsory. In the United States, New Hampshire is the only state that doesn’t mandate commercial auto insurance, but it does require drivers to pay for damage they cause while driving.
Table of Content
- What is Commercial Auto Insurance?
- Liability coverage
- Collision insurance
- Comprehensive insurance
- Personal injury protection insurance
- Gap insurance
- Towing and labor insurance
- Rental reimbursement insurance
- Uninsured motorist insurance
- Underinsured motorist insurance
- Medical payments coverage
- Pros and Cons of Auto Insurance for Business Owners
- Top Companies That Offer Auto Insurance for Business Owners in the United States
- The Hartford
- Progressive Commercial
- Commercial Insurance
What is Commercial Auto Insurance?
Commercial auto insurance is known to provide insurance coverage for any vehicle that you use for business purposes, and for your commercial drivers. As a business owner, you can get commercial vehicle coverage for a single vehicle or a fleet of vehicles.
A commercial auto policy can include several types of optional coverage, allowing you to adjust the policy coverage to your particular business circumstances and the use of your vehicles. In the event of an incident, such as damage to one of your commercial vehicles from weather, an accident, or some other incident, you can file a claim and receive compensation that will help to cover the cost of repairs.
Also note that if you or any of your drivers is at fault in an accident that injures another person or damages their property, that person can file a claim with your insurance company. In this case, it falls on your commercial vehicle liability insurance to cover the costs of the claim, up to the limit of your policy.
Have it in mind that most business owners in the United States prefer to buy a commercial umbrella policy to cover the cost of large liability claims that exceed the limits of the vehicle liability policy. Note that this strategy can provide much higher limits, in $1 million dollar increments, to cover the costs of liability claims and lawsuits and protect the business financially.
10 Types of Auto Insurance for Business Owners
You may already know how auto insurance works, but most people may not know the different types of Auto Insurance. Here are a few of the basic auto insurance types, how they work and what they cover.
Liability coverage is a mandatory requirement in most US states to drive a car. Liability insurance may help cover damages for injuries and property damage to others for which you become legally responsible resulting from a covered accident.
Collision insurance may cover damage to your car after an accident involving another vehicle and may help to repair or replace a covered vehicle.
This auto insurance can provide an extra level of coverage in the instance of an accident involving another vehicle. It may help pay for damage to your car due to incidents besides collisions, including vandalism, certain weather events and accidents with animals.
Personal injury protection insurance
Personal injury protection insurance may cover certain medical expenses and loss of income resulting from a covered accident. Although it depends on the limits of a policy, personal injury protection could cover as much as 80% of medical and other expenses stemming from a covered accident.
Notably, car value can depreciate quickly, so an auto insurance settlement might not be enough to cover the cost of a loan. Gap insurance may help certain drivers cover the amount owed on a car loan after a total loss or theft.
Towing and labor insurance
This insurance is available if you already have comprehensive car insurance, towing and labor insurance may reimburse you for a tow and for the labor costs to repair your vehicle.
Rental reimbursement insurance
Trying to figure out how to get around after an accident can be very costly. Rental reimbursement insurance helps pay for a rental car if your vehicle cannot be driven after an accident.
Uninsured motorist insurance
This motorist insurance can protect you and your car against uninsured drivers and hit – and – run accidents. This coverage is often paired with underinsured motorist insurance.
Underinsured motorist insurance
In the United States, a lot of drivers choose to carry the minimum in liability coverage to save money, but this might not provide enough coverage. Underinsured motorist insurance can protect you in the event of an accident with a driver whose insurance is not enough to cover the costs.
Medical payments coverage
Medical costs following an accident can be very costly. Medical payments coverage can help pay medical costs related to a covered accident, regardless of who is at fault
Pros and Cons of Auto Insurance for Business Owners
Commercial auto insurance can really be a businessman’s best friend in case of an automobile – related crisis. Although it can save you a lot of money that goes in repairing any damage due to an unforeseen mishap, it still has some drawbacks you will need to consider.
- Provides auto repair coverage due to damage in case of an accident
- Lawsuit coverage, including legal fees, brought against you
- Provides coverage in cases of vandalism, natural calamities, fire, theft, or even terrorist attacks
- Provides premium discount in case of theft or owning multiple insurances with the same insurance company.
- Provision for extending coverage to someone else driving your vehicle with consent
- Survivors of an accident are provided with extra benefits in case the accident caused any deaths
- Covers for third – party penalty claims
- In case of no claim within the policy period, the no – claim bonus is awarded during renewals.
- Can be written off as business expenses and can be counted in as tax deductibles
- Does not cover for any claims outside the contract
- Does not cover for electrical or mechanical breakdown
- Any claims arising if the vehicle is used outside the insurer – defined geographical location
- Any claims arising due to ionizing radiation, nuclear perils, or any subsequent loss or damages
- Includes deductibles which will be mentioned in the policy papers
- There will be no coverage provided in case a mishap occurs while the vehicle is being driven by anyone except the insured driver.
Top Companies That Offer Auto Insurance for Business Owners in the United States
Business owners who need commercial auto insurance should look for reliable providers that can offer quality coverage at an affordable rate and that can suit their business. Owing to the number of factors impacting commercial auto insurance costs, business owners should try to understand which factors relate to their situations and how those factors may affect their bottom line. Nonetheless, here are top auto insurance providers to consider.
Geico is a well known commercial auto company for ride – share and on – demand delivery drivers who want one auto insurance policy. The company developed ride – share insurance that’s a hybrid of personal and commercial auto and provides coverage through all phases of a ride – share, including when the driver is driving to pick up or waiting for a passenger.
Geico can also write commercial auto insurance for a sole proprietor with a single company car or a fast – growing business with an entire fleet of vehicles and offers fast, 24/7 claims service.
The Hartford is a wonderful option for professionals, such as consultants, architects, and engineers who need commercial auto insurance and have excellent driving records. Note that the company includes two programs automatically in its commercial auto premiums: accident forgiveness and fender bender forgiveness.
According to reports, the first keeps business owners’ auto insurance rates the same after an accident if they have maintained a clean driving record for three years. Fender bender forgiveness coverage protects against glass claims, towing claims, and increased premiums after accidents that cost less than $1,000.
Nationwide, a national, renowned carrier, specializes in both property and casualty insurance and offers a wide array of commercial insurance products. Note that this carrier also boasts a high customer satisfaction rating. Contractors, in particular, can find comprehensive coverage they need from Nationwide, including customizable commercial auto and protection for equipment in transit to job sites.
Howbeit, this company does not have specific pricing available on its website; however, you can get a ballpark cost of what other businesses in your industry pay for certain types of coverage with its Coverage Advisor tool. You just have to simply enter your industry, location, number of employees, property and equipment replacement cost, and number of business vehicles.
The tool does not include every industry that Nationwide covers. Nationwide also provides flexible payment options, and you may find discounts for buying multiple policies. For commercial auto, Nationwide also offers discounts for anti – theft devices, membership in certain organizations, and a safe driving history.
Note that business owners looking for ways to save money on their business auto insurance may benefit from getting quotes with Progressive Commercial. The insurer boasts eight discounts for qualifying policyholders, including some for bundling policies, paying premiums in full, and signing up for electronic payments.
Also note that business owners with a fleet of vehicles can also get a 5% discount by signing up for Snapshot Proview, a plug – in device that helps Progressive Commercial offer personalized auto rates and fleet management assistance.
Commercialinsurance.NET is a different kind of insurance company. Instead of writing policies, this company refers small business owners to the best carriers, agencies, and brokerages for their particular insurance needs. As the business owner, you submit your information, and a representative calls to walk you through your commercial auto insurance quotes. At that point, you pick the right one for you, and the representative connects you to the individual who can write the policy. Most business owners can get insured within 30 minutes of submitting their information.
Business owners are always concerned with time and money, and while these are crucial factors when it comes to getting coverage for business – owned cars, you also want to work with a commercial auto insurance company that understands your specific risks and offers expertise in your industry.
One of the best ways to find a commercial auto policy to suit your needs is to speak with an independent agent who specializes in business insurance. These agents can compare policies and rates so you can find a policy you can afford.