Businesses with their own fleet of vehicles often need commercial auto insurance. These policies cater specially to the needs of business drivers. For this reason, they often differ from personal auto policies.
However, no two commercial auto insurance policies are alike. Every business is unique and every driver is different. It often takes time to determine what coverage you need based on your business' individual risks.
Nonetheless, you can still get the right commercial auto coverage, as long as you do the right research.
Step One: Analyze Your Business Assets
Before beginning to search for insurance, business owners should consider the business itself. Ask yourself these questions when you start thinking about coverage:
- What's the business' bottom line? How much can it afford to pay for commercial auto insurance? Getting too much insurance may mean paying a price for coverage that the business cannot reasonably afford.
- How much does the business stand to lose in the event of a vehicle accident? Does the business have the money to afford certain vehicle repairs or replacement costs? Failing to carry the adequate amount of insurance could open the business up to financial risk. Accidents might lead to medical costs, car repair bills and even lawsuits against the business. Businesses need to be able to meet these costs. The right commercial auto policies can help.
It's worth noting that a lot of factors determine insurance affordability. For instance, a business' income and credit may impact the cost of coverage. So, it's critical to have a strong grasp on your assets as you shop for adequate coverage.
Step Two: Analyze the Vehicles and Their Uses
Commercial auto insurance can apply to many different types of business vehicles. The type of vehicles you utilize, and the ways you use them, can often impact the coverage you need.
- The type and value of a vehicle may impact the coverage you need. For example, a personal vehicle often has a different value than a commercial truck, a delivery van or a food truck. These values often influence the financial risks drivers pose to their insurance companies. Because of this, a driver with a high-value or specialty vehicle may need higher levels of collision or comprehensive coverage than another driver would.
- The amount of usage commercial vehicles see often influences commercial vehicle coverage. For example, pharmaceutical representatives may drive company cars hundreds of miles every day as they travel from customer to customer. Food truck operators, on the other hand, may only drive around town but still spend hours parked on a busy street. Each of these vehicles face unique risks, and commercial auto coverage must protect them accordingly.
- A vehicle's use may mandate special commercial coverage. For example, a food truck may come with built-in appliances. Other vehicles may haul high-value items or hazardous materials. These vehicles may encounter risks that others do not.
Step Three: Analyze the Driver
The driver of the vehicle may impact the coverage you need. For example, some companies own vehicles that they let their employees use. Other businesses extend commercial coverage to employees who use their own cars for commercial purpose.
Every employee authorized to drive a company vehicle needs unique consideration when a business buys commercial auto insurance coverage. Employees face unique risks when operating company vehicles. They also bring their own driving risks to the company. Therefore, the business should take steps to appropriately protect their own drivers.
- When insuring company-owned vehicles, company owners should always include all potential drivers on their policies.
- If drivers use their own vehicles, the business should ensure those drivers and vehicles have the correct coverage. They might add those vehicles to the company policy, for instance.
Only hire drivers who have the qualifications and skills to adequately operate the vehicle.
Step Four: Get the Correct Coverage
After you analyze your business, drivers and vehicles, it is time to talk to your agent about getting the right coverage. Some of your choices might include:
- Collision Coverage: Should a company vehicle be involved in a wreck, this coverage can help repair or replace it.
- Comprehensive Coverage: Commercial vehicles may face damage from incidents away from the open road. Fires, theft, vandalism and weather may damage the vehicle. Comprehensive coverage can provide the funds to repair the vehicle and replace lost items.
- Liability Coverage: Your employees might be deemed at-fault for an accident that injures someone else or damages to their property. This coverage can help you compensate third parties for those damages. It may also help your business deal with any legal action taken against it for the incident.
- Uninsured/Underinsured Coverage: This coverage can help a driver cover losses if they're involved in an accident where the at-fault driver who doesn't have the right coverage.
Policyholders should also make sure they have the appropriate coverage for any contents they carry in their vehicles. While comprehensive and collision coverage often provide this protection, some items may need extra care. Inland marine insurance or a special contents rider may be necessary.
Analyzing your business, drivers, vehicles and their intended uses sets a foundation that helps you get commercial coverage. By working with your insurance agent, you can get a policy that meets your business' need and budget.
We've got you covered. Call Auto Insurance Discounters at (866) 288-6545 for a fast, free commercial auto quote.