Businesses are required to have commercial auto insurance, but most of them don’t know what it covers or why they need it. It’s not just about protecting your own car from damage caused by your business – commercial auto insurance protects your business from lawsuits and regulatory fines if you cause an accident with your car. Here are seven things you need to know about commercial auto insurance for businesses that will help you understand why you need it, how to get the best rates, and how it works to protect your business from accidents and legal trouble.
1. Commonly Asked Questions
If you’re launching a small business and need help picking out auto insurance, your most likely questions are probably going to be: What is commercial auto insurance? What coverage do I need? And how much will it cost me? That’s where we come in. We’ll get through each of these FAQs below. And if you still have any questions, feel free to reach out—we want to make sure you understand everything about commercial auto insurance. Let’s start with your first question…
2. Common Types of Coverage
Though there are a number of different factors that impact your insurance rates and policy, you should have a basic understanding of coverage options. Here are some of your most common types of commercial auto insurance coverage: Bodily Injury Liability: This is essentially how much money you’re willing to pay out in case someone is injured while they’re in or around your vehicle. It can be broken down by bodily injury per person, bodily injury per accident, or total bodily injury liability. Property Damage Liability: This is how much money you’re willing to pay out if someone damages someone else’s property through using your vehicle.
3. When Does it Make Sense to Get Business Car Insurance?
Since auto insurance is a regulated industry, you must meet specific requirements in order to get coverage. While every business owner can purchase auto insurance policies, there are situations when it makes sense—and times when it doesn’t. For example, if your company owns multiple vehicles that see consistent use—and they aren’t used primarily for personal reasons—you may be better off with commercial coverage than if you were buying it on an individual basis. Read on to learn more about some of these situations and how they might apply to your business or personal situation.
4. How Long Should I be Insured?
There are two reasons why you need auto insurance. One, if you get into an accident (which seems increasingly likely these days) and your vehicle is damaged, it can be costly to fix. Two, if someone else gets into an accident because of something you did (like crossing a double yellow line) and it causes property damage or injury, then that other person might sue you. Insuring your car gives you protection from both of those scenarios. It’s also good to remember that liability coverage protects other people when they are injured as a result of your actions. So don’t forget about them!
5. Is There Anything I Should Do Before Buying?
Before you buy commercial auto insurance, talk with a representative about your business’s needs. This will allow you to get a better understanding of what you need and if it fits into your budget. Don’t forget to ask about discounts! If there are certain safety features already in place in your vehicle or workplace, you may be eligible for additional discount(s).
6. Where Can I Get Quotes?
When you’ve narrowed down your search and found a few insurers that seem like a good fit, get quotes. Most companies will let you do so online, with nothing more than your business’ name, address and phone number. Quotes are typically free; make sure to request a free agent when you call in (or when going online) so they know that’s what you’re looking for. If not, they might try selling you on other coverages that aren’t relevant or right for your business—and if you have employees and/or assets, it’s worth asking about them regardless of whether or not it seems necessary.
7. Why would I Buy Instead of Renting?
If you decide to go with a commercial auto insurance policy, instead of renting a car when needed, you’ll need to know if it makes sense. If your business drives 5,000 miles or less per year, it may make more sense just to rent. However, if your business drives 5,000-15,000 miles annually—or needs specific vehicles that aren’t available on demand (such as vans) —then buying commercial auto insurance may be right for you. Do some research and think through how often you plan on using a vehicle and what type of vehicle(s) would work best with your company. As with any kind of insurance policy, researching providers and coverage options can help ensure that you get exactly what you need at an affordable price.