A Beginner’s Guide to Commercial Auto Insurance Policy

What Is Commercial Auto Insurance?

Commercial auto insurance, also known as commercial vehicle insurance, covers different vehicles used to carry out work duties. It does not cover personal automobiles that are used for business purposes but are strictly limited to business-owned automobiles. Coverage depends on the specifications of your business. Your policy can include damage to your vehicle, damage to other people’s property, and injury to others.

 Who Needs Commercial Auto Insurance?

  • Do you conduct a service with your car?
  • Do you require higher limits of liability because of the nature of your work?
  • Do you transport a considerable weight in tools or equipment or own a towing trailer used to conduct your business in your vehicle?
  • Do your employees drive your automobile in the course of doing business, whether making deliveries, chauffeuring, or running work errands?

If your answer is yes to any of the questions above, then this policy is for you. Here are some specific examples of how a vehicle can be used in a business context:

  • Pizza delivery
  • Chauffeuring: limousine service or taxi service
  • Taking real-estate clients to see different listings
  • Transporting work equipment via a trailer
  • Doing construction work
  • Taking tourists to various attractions
  • Transporting flammable or hazardous materials
  • Hiring your vehicle out to tow other automobiles

What Does Commercial Auto Insurance Cover?

You can customize your auto insurance policy to include multiple individual coverages that suit your specific business needs and the use of your vehicles. If the vehicle ever gets damaged through bad weather, head-on collision, vandalism, theft, or some other covered event, you can file a claim and receive compensation that will help to cover the cost of repairs.

You are also covered for liability costs if you or any of your employees are at fault in an accident and injure another driver or destroy their property. The injured person may sue for damages or file a claim with your insurance company. In either situation, your policy will pay compensation to the driver. Like every other insurance plan, your commercial auto insurance has a limit and will only cover the costs of the claim up to your policy’s limit.

If you want to increase your coverage range, you can buy a commercial umbrella auto plan. This plan kicks in when the costs of your liability claims exceed the limits of the vehicle liability policy. You can never be overprepared for emergencies, so the umbrella policy gives you maximum protection.

What If You Already Have Personal Auto Insurance?

Having a personal auto insurance policy does not affect getting a commercial vehicle plan because both offer different coverages. Your personal auto plan only covers you when you use your vehicle outside of work and while commuting. If you use your vehicle for any business-related purpose, your personal auto policy will not cover any damage that happens during this time.

Driving your car to and from work without using it for any commercial purpose means it’s covered under your personal auto plan. If you use it occasionally for commercial purposes, you must ensure that you have enough liability coverage under your personal policy or purchase commercial auto insurance.

Contact your agent to discuss if you use your vehicle for work errands because your employer may be obligated to purchase a non-owned business liability endorsement for these situations.

What Kind of Vehicles Can Get Commercial Insurance?

There is a wide range of vehicles that can be covered by a commercial policy. They include cars, tractors, trailers, vans, buses, and construction vehicles. Many of these vehicles are not eligible for a personal policy, like trailers and tractors. These require a wider limit and coverage because of the nature of use. They are used to run work errands at riskier times and have a significantly higher chance of getting into accidents than personal cars.

Do you have any additional questions about your car insurance? Contact the experts at First Insurance Solutions today. We are always eager to assist you with all your coverage needs.

By First Insurance Solutions

First established in 2003, the experienced insurance consultants at First Insurance Solutions provide unmatched insurance solutions to increase indemnity against personal and business risks. We aim to provide businesses and individuals with quality, reliable insurance policies that meet their needs and budget.