Does your business own company vehicles? Do you frequently use your personal vehicle for business purposes? If yes, you may consider Commercial Auto Insurance (sometimes called Business Auto Insurance).
This Ultimate Guide contains all of the information you need to make an informed decision. We explain what Commercial Auto is, what it covers, who needs it, and how much it costs. We also recommend where to look for competitively priced insurance, so you can choose with confidence.
What is Commercial Auto Insurance?
Commercial Auto Insurance is exactly what it sounds like–auto insurance for commercial vehicles (ones owned by a business). Just like it's important to keep your personal assets and business assets separate, it's important to have commercial vehicles insured by your business.
Commercial Auto Insurance repairs and replaces (depending on the coverage) company vehicles that are involved in accidents.
What Does it Cover?
Commercial Auto Insurance covers a variety of instances, depending on what you select. It can cover bodily injury, medical expenses (after Workers' Compensation is maxed out), collision (damage caused by another vehicle), comprehensive coverage (damage from fire, theft, falling objects, weather-related damage), and other specified causes of loss (lists the specific situations damage would be covered).
What Doesn't it Cover?
Commercial Auto does not cover damages incurred from war or civil disturbances, relatives of employees driving company vehicles, or damage incurred while committing a crime. Depending on your industry, there may other circumstances where commercial auto will not cover damages.
What's a Situation You Would Need Commercial Auto Insurance?
Let's say that your company owns a vehicle and an employee uses the company vehicle during working hours. If this employee gets into a car accident, commercial auto insurance can repair or replace the vehicle (depending on the severity of the damage) and pay for the employee's medical expenses if Workers' Comp doesn't cover it all.
Additionally, if you use your personal vehicle for businesses purposes (think Uber driver, independent mail delivery service, etc.) your insurance company may not cover damages if you were "working" when the accident occurred. Discuss this with your current insurance provider.
How Much is Commercial Auto Insurance?
Just like personal auto insurance, the cost of Commercial Auto Insurance varies. Business owners can expect to pay anywhere from $700 to $3000 per year–or more depending on the number of commercial vehicles.
Factors impacting the cost include the employees' driving records, the amount of coverage and coverage limits, the type of coverage, the value of the vehicle, the number of vehicles, the value of the transported goods, and other factors.
Who Needs Commercial Auto Insurance Insurance?
Any business that owns company vehicles needs commercial auto insurance. Even if you use a personally owned vehicle for business purposes, your personal auto insurance may not have enough coverage and may not cover the vehicle if it was being used for business. It is especially important if you deliver goods or use your company vehicle on a daily basis.
Where Can You Find Commercial Auto Insurance?
Commercial Auto Insurance is available from numerous insurance providers —brick and mortar as well as online. We've partnered with Next Insurance and their rates start at just $25 per month. Use our partner link to get a free quote.
Learn more about 12 other types of insurance. Take a look at our Ultimate Guide to Selecting Business Insurance.
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