There are over 7 million private and commercial vehicles on the road in North Carolina. Is transportation a necessary aspect of your business? If so, you’ll want to ensure you have a good commercial auto insurance policy.
A commercial auto insurance policy helps protect your business in case you get into an accident. There are many factors that you should consider when choosing commercial auto insurance. One of these factors is the price of your insurance.
How much does commercial auto insurance cost? There are many aspects that affect the cost of commercial auto insurance. Here’s everything you need to know.
Who Needs Commercial Auto Insurance?
Any business that uses vehicles in their work needs commercial auto insurance.
This also includes those who use their personal vehicle for work; personal insurance won’t cover many business activities that are offered with a commercial auto insurance policy.
Here are a few examples of businesses and activities that need commercial auto insurance:
- Deliveries and pickups
- You drive to see clients and customers
- You rent vehicles for yourself and employed drivers for work purposes
- You legally need to have a commercial vehicle for your business
There are also times when commercial vehicle insurance isn’t necessary but a good idea.
For example, if you ask you or your employees regularly pick up office lunches and supplies, run errands, or give clients a ride, commercial auto insurance will provide further support in case you or your staff get in an accident.
How Much Does Commercial Auto Insurance Cost?
The cost of auto insurance depends on the vehicle you own and the type of policy you choose. There are also specialty insurance options for specific businesses, such as ridesharing.
Most businesses can expect to pay between $750 to $1,200 annually per car. But it’s best to look at some of the other factors we’ll mention in this article.
Different Factors That Affect Your Insurance Rates
The cost of commercial car insurance will depend on many factors, whether it’s the policy you choose or the car you own. Here are a few examples.
The Value of Your Vehicle
Higher valued vehicles usually result in higher premiums. The percentage of potential physical damage is judged by the value of your car.
Vehicle Type
Larger and heavier vehicles, such as trucks and commercial vans, will have higher premiums than smaller cars. That’s because they usually require more coverage than smaller cars.
Distance You Travel
Do you drive long distances with your commercial vehicle? This can increase your car insurance’s cost. You could also pay a higher premium if you regularly cross state lines.
Number of Vehicles and Drivers
The more vehicles and employed drivers you have, the higher premium you’ll pay. The more drivers and vehicles you have, the higher the risk of a car accident under your business’s name.
Coverage Type
Business owners typically have flexibility when choosing car insurance coverage. Some policies are required by your state. The most coverages you choose, the higher your premiums will be. But more coverages also offer better protection.
Coverage Limits
If you have higher limits, you’ll pay more in premiums. But higher limits also mean you receive more protection if you need to file a claim.
Cargo Type
Do you carry cargo? The type of cargo you’re carrying will also affect your premiums. If you’re carrying something simple, such as hay, your premiums will be lower compared to vehicles that regularly carry hazardous cargo.
Deductibles
If you opt for a high deductible, your premiums will be lower. Most insurance agents recommend choosing the highest deductible you can afford.
Your Claims History
Does your business have zero claims? If so, you could potentially save on your car insurance premiums. Insurance agents will decrease your premiums if you have zero claims.
Credit History
Does your business have great credit? If so, you could save a significant amount of money on your premiums. Those with bad credit scores tend to pay more for their insurance.
What Commercial Auto Insurance Covers
There are many different coverages your policy requires and others you can add on to protect you and your drivers from injury and vehicle damage. Here are a few examples.
Medical Payments
If you or an employed driver get into a no-fault car accident, your insurance company will handle your medical expenses up to your insured amount. Many states require medical payment coverage.
Liability
In case you or one of your drivers is at fault in a car accident, liability still covers you. This policy covers the other driver’s repair bills, medical bills, funeral expenses, lost wages, legal fees, and any other applicable payments.
Collision
If your business vehicle is damaged in an accident, collision covers the repair fees. Collision applies to accidents with other vehicles as well as hitting another object, such as a tree or a pole.
Uninsured Motorist
In case you get in an accident with an uninsured motorist, you’re still covered under your policy. Some of these coverages include pain and suffering as well as property damage.
Hired and Not-Owned Liability
Does your business regularly use vehicles you don’t own? If so, ensure your policy has this coverage.
Your insurance will cover you and your drivers if an accident occurs while driving another vehicle. It also covers medical expenses and physical damage to a third party.
Hired Auto Physical Damage
This policy is similar to the hired and not-owned policy, except it only covers damage to the car.
Comprehensive
Comprehensive helps cover vehicle repairs if your vehicle was damaged by an event other than a collision.
This includes fire, vandalism, natural disaster, theft, falling objects, and windshield damage. Comprehensive may also pay for your new vehicle if your car is stolen.
Roadside Assistance
If you need vehicle assistance immediately, roadside assistance is offered by many insurance companies and is available 24/7.
You’ll likely need roadside assistance if you need fuel, towing, a jump, flat tire, and even if you’re locked out of your vehicle.
Get Commercial Auto Insurance in North Carolina
How much does commercial auto insurance cost? The cost depends on your policy, the vehicle you own, and other factors. If your business is looking for auto insurance, click here for a free quote.
