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Do You Need Commercial Auto Insurance?

Auto insurance conversation

Like all other types of commercial insurance, business vehicle auto insurance offers protection from financial losses. The involvement of commercial vehicles in traffic accidents can have costly consequences. Commercial automobile insurance provides coverage for a wide range of vehicles, as well as for risks ranging from a car crash to auto theft.


Knowing when you need commercial auto insurance will help you make smart choices for your business. It’s also very important to accurately determine the amount of coverage required to get the most from this product without overspending on it.


What’s Commercial Auto Insurance?

Commercial car insurance is essential for all companies that own and operate vehicles like cars, minivans, buses, trucks, and others.


If you are driving a business car and you cause an accident, you’re not going to be covered by your personal auto insurance.  Commercial automobile insurance works in the same way but its coverage is available for vehicles owned by a business. Some examples of such vehicles include delivery vans, buses transporting employees, and trucks for the long-distance transportation of goods.


Some of the risks that commercial auto insurance offers coverage for include:


·         Physical damage to a vehicle due to a car crash

·         Damage resulting from natural disasters, theft, vandalism

·         Medical payments and personal injury claims resulting from a traffic accident

·         Damages resulting from uninsured/underinsured driver accidents

·         The inability to use commercial vehicles due to damage (in which case rental costs may be covered)

·         Other coverage (towing expenses, labor, auto loan/lease gap coverage, etc.)


The Importance of Having Adequate Commercial Auto Insurance

Commercial auto insurance policies usually have higher liability limits than personal automobile insurance policies.


There are also numerous types of coverage that fall under the commercial auto insurance umbrella:


·         Collision insurance

·         Comprehensive auto insurance

·         Personal injury protection

·         Combined single limit

·         Property damage liability insurance

·         Bodily injury liability insurance

·         Medical payments insurance

·         Underinsured motorist coverage


Auto insurance can be used to mitigate numerous risks and save businesses lots of money in the event of unforeseen circumstances. The amount of coverage will depend on the size of the fleet, its intended use, and some of the most common issues the business faces in its line of operation.


While commercial automobile insurance is very extensive, it doesn’t deliver all types of coverage. Some of the things that aren’t covered under the policies mentioned above include:


·         Damage sustained by a personal vehicle used for work

·         Damage in the event of a rental car used for work colliding

·         Damage sustained by customer vehicles

·         Damage to unattached tools and equipment in a commercial truck


The typical cost of commercial auto insurance is about 147 dollars per month. Small businesses spend a lot less on this kind of coverage while still benefiting from reliable protection.


To put that number in perspective, you will benefit from some understanding of commercial vehicle crash costs.  For a start, the number of commercial truck accidents is on the rise in the US. Multiple factors contribute to that troublesome trend and you need to be aware of this risk as a commercial vehicle owner.


The average cost of a commercial truck accident that causes personal injuries is 148,279 US dollars, reports suggest. Commercial auto accidents that cause fatalities have a cost exceeding seven million dollars on most occasions.


As you can see, the cost of insurance is negligible in comparison to the financial losses that stem from lacking such a security blanket and having a commercial vehicle crashing. If you want to get your business thriving in the long run, getting some type of protection against common risks is essential. Owning and operating vehicles makes commercial auto insurance non-negotiable.


When and How to Get Commercial Auto Insurance

Your organization will need commercial auto insurance if:


·         You use commercial vehicles to conduct a service

·         Commercial vehicles are used for the transportation of goods and products

·         You need a commercial vehicle to reach the location where you’ll be doing work (electricians, plumbers, construction professionals)

·         Workers and other passengers are transported by a vehicle under the ownership of a commercial entity


Commercial auto insurance is required in most states when company-owned vehicles are operated to do work.


Both North and South Carolina have a commercial auto insurance requirement for all businesses. In North Carolina, there’s a minimum coverage requirement of 30,000 dollars per person or 60,000 dollars per accident. The property damage liability coverage is 25,000 dollars per accident. In South Carolina, the bodily injury per person is set at 25,000 dollars and per accident – at 50,000 dollars. The property damage liability coverage minimum is 25,000 dollars per accident.


Now that you know you have to get such insurance, it’s important to determine exactly how much you need and which policy makes the most sense for your business.


When considering commercial auto insurance options, you’ll have to take into account factors like:


·         The coverage that you’re entitled to under your personal automobile insurance policy

·         The main ways in which a business vehicle is used

·         Whether your industry involves high-risk activities associated with auto damage or injuries

·         The types and kinds of vehicles in your commercial fleet


The size of your fleet, your industry’s risk profile, the driving records of people responsible for operating commercial vehicles, and the types of risks you want to mitigate will all impact the premiums you’ll need to pay when getting commercial vehicle insurance.


When examining insurance policies side by side, we’d also recommend paying attention to the add-ons available. Having the option to get coverage for additional risks is always a good idea, especially if such add-ons are available at a reasonable price.


Always Explore Your Options Before Getting Commercial Auto Insurance

Going for the cheapest kind of commercial auto insurance doesn’t make sense. Such a decision will save you money right now but it may be an incredibly costly mistake that limits coverage in the event of an accident.


Rather, you should seek a personalized solution, accounting for specifics in your industry and field of operation.


Working with an insurance advisor will help you make sense of the options and pinpoint the one that is best aligned with your needs. Contact us now to learn more about commercial auto insurance and make an informed choice for your business.


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