What is Commercial Auto Insurance?
Commercial auto insurance covers vehicles that are registered to a business or are used mostly for work. The policies usually offer liability limits of $500,000 to $1 million. This is much higher than personal auto insurance which caps out around $300,000.
Who Needs Commercial Auto Insurance?
You'll need to get commercial auto insurance if your vehicle is in your business's name, has business signs or logos on it, carries tools or equipment, or transports paying customers & passengers, or if multiple employees are driving company vehicles. But this is important: personal auto insurance won't cover any business use. If you file a claim and it turns out you were actually on the job when the accident happened, they can still deny the claim
Some states require commercial vehicles to carry liability insurance. In the states where Insurance Navy operates - Illinois, Texas, Indiana, California, Nevada & Georgia that's typically going to be the case. Though the minimum requirements can vary from one place to another - in Illinois for example you need 25/50/20 ($25,000 per person, $50,000 per accident, $20,000 to fix damages) while Texas is 30/60/25.
What Does Commercial Auto Insurance Cover?
Commercial auto insurance is very similar to personal auto policies in terms of the damages it covers. Standard policies include liability coverage with policy add-ons available to give you and your employees better protection.
Below are the different Commercial auto insurance coverages available to your business:
Liability Coverage
Liability insurance covers any bodily injury and property damage that you cause in an accident. Commercial Auto Liability coverage is a crucial part of any commercial auto insurance policy and is the state standard.
To be considered a legal driver, you must carry a specific amount of commercial auto liability insurance in nearly every state. But also remember that a liability policy will never cover compensation for injuries or personal property damage following an accident.
Collision Coverage
Collision insurance coverage compensates for physical damages to your commercial auto that result from an accident with another car. This type of insurance is always paired with comprehensive coverage. It covers the repair costs for your vehicle regardless of who was found to be at fault for the accident.
Comprehensive Coverage
Comprehensive coverage protects your commercial auto after it sustains damage from a non-collision-related incident.
This can include vandalism, theft, fires, extreme weather damage or natural disasters. When filing a claim for comprehensive coverage, your car must not have been in use when the damage occurred.
Other Types of Coverage
You have some options if you want to expand your commercial insurance coverage and reduce liability.
Below are some common types of insurance you can purchase to strengthen your commercial car insurance policy and receive the most benefits.
Medical Payments
Medical payments coverage, also called MedPay, covers medical bills you and any passenger accumulate following an accident. It pays the medical expenses no matter who is found to be at fault.
Roadside Assistance
If you have mechanical problems, roadside assistance will help with tools to resolve various issues with your commercial vehicle. This can include fuel delivery, fixing flat tires, towing, and locksmith services for your fleet vehicle.
Rental Car Reimbursement
Now, if you do end up getting your vehicle in the shop after a crash you're going to need a temporary replacement, and that's what rental reimbursement is for.
Typically it's around $30-50/day, up to a certain limit.
Uninsured/Underinsured Motorist Coverage
14% of the drivers in this country have no insurance at all. That's why we recommend you get UM/UIM coverage. It's basically a safety net that'll cover your medical expenses and vehicle repairs if you get in a crash with one of those uninsured drivers.
Customizing Your Commercial Auto Policy
Like other types of business insurance, commercial auto insurance is customizable with a wide range of coverages. Not only do you have the chance to include specific policy add-ons to your coverage, like collision and comprehensive insurance, but you can also adjust your coverage limits. Many commercial automobile policies offer coverage up to $1 million.
How Much Does Commercial Auto Insurance Cost?
How much you'll pay for commercial auto insurance varies depending on the type of vehicle, how much of a risk your business is, and how high you go on the liability limits. For small businesses like yours this usually works out to an annual cost of:
44% of small businesses pay under $1,500 annually for commercial car insurance.
34% of small businesses pay anywhere from $1,500 to $3,000 annually for commercial car insurance.
22% of small businesses spend over $3,000 annually on commercial car insurance.
What Determines Commercial Auto Insurance Rates?
There are several things to consider when insurance providers establish your rates. Facts about you, your business, and your vehicles are noted. You can customize or control some aspects for better rates, while you cannot do so for others.
The list below outlines what your insurance provider will look into when settling your commercial vehicle insurance rates.
Type of vehicle - The make, model, and year of the vehicle you are trying to insure will be considered. The larger your vehicle is, the higher the insurance rates will be.
Driving records - Both you and your employee’s driving records will be considered when establishing rates. Insurers need to know how much of a risk a driver is before handing out coverage. Your premiums will increase if they find several accidents on your employee’s driving record.
Industry - Some industries come with higher risks than others. A construction company with commercial car insurance for their dump trucks will have higher premiums than a tech start-up that uses their sedan occasionally.
Coverage limits - How much coverage you want will impact your rates. The higher the liability limits and policy add-ons you want, the more you will pay annually for insurance.
The number of vehicles - Not only will the size of your company cars affect your rates, but so will the number you are trying to insure. The more vehicles you add to a policy, the higher your rates will be.
Usage - If you've got a job that involves a lot of travel, or hauling expensive cargo, you're going to be looking at higher premiums. But if you only use your vehicle locally and don't drive a whole lot, you might be eligible for lower rates.
How to Get the Cheapest Commercial Auto Insurance
Listed below are some ways to get a break on commercial vehicle insurance rates.
Shop Around for Quotes
Get A Quote From 3-5 different insurers. Commercial auto insurance rates can swing by as much as 30% or even more between different carriers, so you're leaving money on the table if you're not comparing rates.
At Insurance Navy, we've got connections with carriers like Progressive Commercial, National General, and Nationwide. We can shop around for you to find the best one.
Ask about Discounts
Some common commercial auto discounts you might be entitled to include: throw in a full year's payment upfront (you can get a 5-10% discount that way), or if you've got three or more vehicles, you might qualify for a discount on your multi-vehicle fleet (10-15% off).
Then there are the CDL holder discounts, and the claim-free discounts you can get after three or more years without making a claim. If you bundle any of this with general liability or BOP policies, you might be able to shave off even more. Just ask your agent to see which ones you qualify for.
Clean Driving Records
You and your employees' driving records will come into question when establishing your annual premiums. This is not unlike personal auto insurance. Driving histories tell insurers how much of a risk you will be on the road.
Driver Education Courses
After you have hired your employees, learning about safer driving with a driver education course could be beneficial.
Regardless of their driving record, a driving education course can teach your workers how to be safe and intelligent drivers. Safe driving will then lead to fewer insurance claims in time.
Get a Commercial Auto Insurance Quote Today
Ready to get a commercial auto insurance policy? Contact us today to get a free commercial auto insurance quote. Make sure you let us know your zip code, details of your business, and information on your vehicle. We can better understand the insurance coverage you need by providing this information.
Quotes are available either at one of our many locations or online in just a few clicks via our website and mobile app. We are also just one call away. Get your commercial vehicle insured today and get your certificate of insurance instantly.
Types of Commercial Vehicle Insurance Offered Covered
Commercial vehicle insurance products can cover any vehicle you or your employees use to conduct business.
Examples of such vehicles may include:
Commercial Auto Insurance is Easy with Insurance Navy!
For an Affordable Commercial Auto Insurance quote, Call Insurance Navy™ today at 888-949-6289
* Commercial Auto may not be available in every state; please call an agent for more information.
Commercial Auto Insurance FAQ
What's the Difference between Commercial Auto Insurance and Personal Car Insurance?
A standard or personal auto insurance policy will not cover any personal vehicles, damage, or injuries when used for work or business purposes. A commercial auto policy will cover everything that a standard car insurance policy and more with the insurance for the following:
- Injuries caused to other drivers by you or one of your drivers
- Damages caused to other cars and property by you or one of your drivers
- Any emergency care claim expenses as a result of an accident
- Physical Damages to your vehicles, regardless of fault
- Legal expenses that ensue from an accident
- Special GAP insurance for commercial vehicles that are leased or financed
To be insured against the damages above, you would need full commercial car insurance, which goes beyond just minimum liability policy that covers any damage or injuries you or one of your drivers cause to other drivers on the road.
Collision, comprehensive, and GAP insurance are all available to add on a commercial auto policy for maximum financial protection.
How Many Vehicles Can I Insure Under One Commercial Auto Insurance Policy?
In standard car insurance, policyholders can insure a maximum of five cars under one auto policy. This rule also stands for commercial auto insurance. Business owners with a fleet of up to five vehicles can have them all, along with the drivers, listed on one company policy.
The number of insured drivers is also limited to around five, while permissible driver privileges extend to all employees. When purchasing multiple policies for a fleet of trucks or vans with more than five vehicles, you can have multiple insurance providers and their policies for your different commercial vehicles.
How Can You Reduce The Rates of Your Commercial Auto Insurance?
The following are some helpful tips on lowering the annual cost of your commercial auto coverage. Much like regular auto insurance, it's all about safe driving and the route with the lowest risk:
- Have drivers with a proven track record of safe driving.
- Bundle your commercial auto insurance with another type provided by the same company.
- Keep business vehicles in a secure and safe location rather than an open lot.
- Increase your policy's deductible (the amount you pay before a claim is processed).
- Steer clear of claims to earn a possible bonus.
- Pay your commercial policy premium every year rather than monthly.
- Maintain a good company credit score.