Wednesday, January 9, 2013

Commercial Car Insurance: What You Need to Know

Having commercial auto insurance is essential, particularly if you use your vehicle for your business, or you drive a company vehicle to the workplace. When it comes to this type of insurance, both the employer and employee have shared responsibilities. This article will discuss how commercial auto insurance protects business owners and employees in the event of an accident, and the types of coverage for commercial driving. 

Importance of Commercial Car Insurance 

If you're a business owner with employed drivers for transportation or delivery purposes then having a commercial auto insurance is crucial for your business. Most states require business owners to purchase a specific amount of commercial liability insurance. Having a commercial insurance policy protects your business from any financial responsibility in case a car accident occurs involving your company drivers. 

On the other hand, if you're a commercial driver, you may also want to consider getting this insurance. Ask your employer about the extent and limitations of the commercial insurance carried by the business. Furthermore, inquire about the types of coverage included in the policy. 

Commercial insurance policies can include comprehensive coverage, collision coverage and uninsured/underinsured motorist coverage. 
Once you know what the business' insurance policy encompasses, you can make a better decision on what additional insurance to purchase for complete protection. 

Don't Put Your Personal Coverage at Risk 

Using your personal car for business purposes can endanger your insurability. If your insurer finds out about it, the company can choose to cancel your insurance policy. Even just making a delivery can be grounds for policy cancellation since the usage of the car is related to your business operations. Moreover, when an accident occurs while you use a personal vehicle for business reasons, the insurance provider may reject your claim. Thus, it's best to purchase commercial vehicle coverage instead of risking your own personal auto coverage. 

Types of Coverage Necessary for Commercial Driving 

States have varying requirements when it comes to business vehicle insurance. The minimum liability insurance required depends on your location. Make sure that you check your state's requirements. Here are other types of commercial insurance: 

Collision Coverage 

This type of coverage pays for damages due to collisions. For example, if your business car crashes with another vehicle, road sign, mailbox or any other stationary object, then your collision insurance will cover the repair expenses. 

Comprehensive Insurance 

This covers damages caused by theft, vandalism, weather conditions and natural disasters. If your commercial car travels through areas with harsh climates or you are driving or parking in unsavory neighborhoods, then you should consider getting this type of insurance coverage. 

Underinsured and Uninsured Motorist Coverage 

This financially protects you when car accidents occur involving underinsured or uninsured drivers. For instance, if you get involved in an accident that results in $100,000 worth of repair expenses, and the underinsured driver only carries $50,000 worth of coverage, then your insurance policy will cover the remaining half. Underinsured/Uninsured motorist coverage is very important considering that there are lots of drivers on the road today who don't have adequate insurance. 

Purchasing adequate commercial auto insurance is a good measure to protect your business. It's advisable to buy more insurance than your state's requirements to ensure that you're well covered. 

Richard Ackerman has worked in the auto insurance industry for many years. He enjoys offering advice on the subject by blogging for car and personal finance blogs.


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