Large commercial trucks account for more than 476,000 of the total vehicle crashes each year in the United States. Such crashes lead to more than $112 billion in total losses to the economy. These statistics indicate the level of risk that your company must deal with as long as there are fleets of cars used for routine business operations.
Taking up commercial auto insurance coverage for your business’ vehicles can be a critical first step towards dealing with probable liability. If you are considering this option, it is essential that you also understand what the policy covers.
Are you wondering what is commercial auto insurance, and what does it cover? Keep reading to learn all about it!
What Is Commercial Auto Insurance?
Commercial auto insurance refers to insurance options that cover trucks, vans, and other vehicles used for business purposes. These cars may either be owned by the business or leased for corporate purposes.
You may be wondering, “do I need commercial auto insurance?” If you want to indemnify your business from the risks of the road, then read on to know why an auto insurance policy is necessary.
When your vehicle is dedicated fully to business use, considering a commercial auto insurance policy is vital. This is because, while you need insurance, you may not be eligible for personal auto insurance.
How Commercial Auto Insurance Works
Now that we have answered the question of what is commercial auto insurance, let’s understand how it works. The various commercial auto insurance definitions point to one central point, which is the need to ensure indemnity coverage to any vehicle that supports your business’ processes.
As a business, you can insure a single vehicle or a fleet of cars for your business. You may have a variety of optional coverage available to you, depending on your insurance provider.
In case of an accident that causes damage to your vehicle, whether due to weather, accidents, or other incidences, you only need to file a claim. Your insurance service provider is then required to compensate you for the cost of repairs as are necessary for your vehicle.
When your driver is at fault, then commercial auto insurance covers the liability on your behalf. Such claims include accidents that injure another person or instances of damages to personal property.
There are limits to the extents of the auto insurance agreement. Most insurance providers underscore that the plaintiff is covered for the incurred damages only to the scope of the limits of the policy.
What Commercial Auto Insurance Covers
Commercial auto insurance has broad coverage. The different commercial auto insurance companies have distinct terms tailored for specific needs. Always read the policy carefully to understand what’s included.
The insurance covers both property and liability. Most states require liability coverage for your business vehicles. Ultimately, property coverage protects your vehicles’ value.
Let’s delve deeper into these two types of commercial auto insurance cover.
In commercial auto insurance, the liability aspect covers property damage and bodily injury liability. If you or one of your workers causes injury to another party when driving, liability coverage pays for the damage. The insurance company also covers legal fees in case there is a need for representation.
Understanding commercial insurance requirements by state is a prerequisite. In most states, registered vehicles should have minimum property damage and bodily injury liability cover. Failure to which, you’ll be liable for fines.
Bodily injury liability covers expenses such as medical, funeral costs, income loss, suffering, and legal fees. The limits are either per accident or per person. When you opt for higher limits, you’ll need higher premiums.
Conversely, the property damage liability covers the property damage you cause when you crash. You don’t need to worry over a damaged fence or a broken side mirror; this coverage will save you the trouble.
Commercial auto property is a component that protects your vehicle’s value. The coverage is either comprehensive or collision. You’ll need to be familiar with your insurer auto policy to confirm the availability of both covers.
The comprehensive coverage pays when you lose your car through theft, fire, flooding, glass breakage, or vandalism. Note that the covered incidences don’t involve other vehicles. This comprehensive insurance is a noble idea if you use your car daily.
Common Types of Auto Insurance Coverage
You may need to assess the commercial auto insurance requirements by state to understand your obligation before accessing auto insurance coverage. In North Carolina for instance, your commercial auto insurance policy covers several components that are not included in the personal auto cover.
If you are in North Carolina and are eager to find a solution for your business’ vehicles indemnity, then you have several coverage options you may consider.
1. Combined Single Limit
Some insurers offer a Combined Single Limit liability. The coverage is inclusive of both property damage and bodily injury. The insurance company sets a maximum amount of compensation in case of an accident.
You may consider this option when applying for auto liability coverage in North Carolina. The policy presents distinct limitations to physical injury claims or when dealing with property damage. If you consider this option, your provider offers you the same coverage per amount incurred in a given claim.
2. Uninsured Motorist Coverage
If you consider this alternative, your coverage will include damage to property and physical injuries. It applies when an uninsured driver is culpable for an offense. You may also have it easy if your business vehicle was involved in a matter of hit-run.
As long as you have the commercial auto insurance coverage, you will have full indemnity.
3. Collision Coverage
The incidences of commercial truck crashes in the United States are quite high. Having a collision insurance coverage is critical. The coverage saves you the agony of recurrent liability related to accidents caused by commercial trucks, buses, or light vehicles belonging to your company.
Collision coverage considers the mechanical and physical damage when you or your driver collides with another car. If you don’t have this cover, you will be liable for your repairs. Your agent will advise you on the best option based on the age and condition of your car.
Time to Indemnify
You no longer need to keep asking the question, what is commercial auto insurance? With this guide, you can access some of the best commercial auto policy options available.
All you need to do is to find a reliable commercial auto insurer with a reputation for delivery, and your commercial vehicles will achieve the desired levels of indemnity in case of an unforeseen occurrence.
Feel free to contact us for expert advice on the various insurance-related questions and needs you have.