Understanding Commercial Auto Insurance

Posted on: Tuesday, October 29, 2013

Most states require that motorists carry automobile liability insurance. Collision damage, to say nothing of bodily injury, could cost you massive out-of-pocket expenses if you had no insurance for your vehicle. Knowing this, why would any business, large or small, fail to insure the vehicles used in conducting their company’s daily needs? Whether you have a fleet of vehicles, or just one van, your business cannot afford to be without coverage. One accident could wipe out your business forever.

What does commercial auto insurance cover?

  • Collision 
  • Personal injury
  • Bodily injury to others
  • Property damage
  • Comprehensive (such as fire, theft, and vandalism)
  • Loading and unloading damage
  • Towing and Labor
  • Rental and/or replacement

Personal auto insurance or commercial auto insurance?

It is important to know the difference between a personal auto policy and one for commercial vehicles; and when one policy applies over the other. One important distinction is usually the liability limit, which may exceed $1M for commercial coverage. Do you use your Prius for more than dropping the kids off and around town commuting? Is it also a vehicle for dropping off packages between stores, or transporting clients? Your insurance company may consider your car to be a commercial vehicle if it is used for more than typical commuting. 

Personal auto policies were not written for businesses, nor do they carry the same scope and rating. Certain vehicle types are even exempt from personal insurance, even if you can use them for both purposes. Insurance companies consider commercial auto insurance and personal car insurance as very distinct entities, with very different policy stipulations. If an accident occurs while you are using your vehicle for your job, your insurer may deny the claim because that usage violates the terms of your personal policy. It is very important that you understand the difference, and can feel secure in knowing that you are covered under any situation.

Get the right coverage

To determine the appropriate coverage under your policy, ask yourself these three questions;

  1. Is the vehicle leased or owned under your name, or under your company’s name?
  2. How is the vehicle used most of the time – for personal use, or company purposes?
  3. Do your employees drive the vehicle, or do you drive the vehicle as a company employee?

You have invested your heart and soul, as well as your money, into your business. Commercial vehicle insurance is often an overlooked necessity. Talk to your insurance agent about your coverage today.

At Core Benefits Group, we have answers. Contact us or give us a call at 1-877-214-2969.   



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