Business Auto Insurance

Business automobile insurance is widely different from personal automobile insurance in its intents and purposes as well as its costs. Most people consider that their personal car insurance protects them for business usage as well as the normal activities of a private person.

Unfortunately, when you assume this, you can inadvertently invalidate the coverage provided by your policy.

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Small-business owners and self-employed individuals often use their personal vehicles in the process of conducting their business.

Hauling goods, equipment, or people can increase liability risks and require a commercial automobile policy to adequately protect your interests.

Indicators that You May Require a Commercial Auto Insurance Policy

• Employees or individuals not listed on the policy drive your vehicles
• Vehicles are registered or licensed in a business name
• Vehicles are used to pickup or deliver goods, used as informal taxis, or to haul equipment related to the business
• Load capacity of over 2,000 pounds or a gross vehicle weight exceeding 10,000 pounds
• Attachments such as snow plows, cooking and catering equipment, or hydraulic lifts added to vehicles
• Business equipment installed such as ladder racks or a permanent toolbox

Often it is tempting to provide rides for individuals to make extra money. There are a number of 'ridesharing' services have become popular to help defray costs of gas and automobile maintenance. When an individual contacts a transportation network company (TNC) as an alternative to a cab or taxi for a ride, the driver provides the services.

The TNC contacts their network of drivers willing to provide these rides with their personal automobiles. Sounds like a perfect idea as long as both the driver and the TNC carry appropriate insurance.

The difficulty is that the National Association of Insurance Commissioners (NAIC) has indicated insurance commissioners across the country are concerned about gaps in coverage between the driver's personal insurance policy and the commercial automobile insurance policy purchased by the TNC.

Gaps in coverage could lead to accidents that occur without the protecting cover of insurance for the driver, the passenger, and the transportation network company.

If farming and ranching is your business, you will likely need a commercial automobile policy. Farmers and ranchers often have heavy trucks for harvesting, hauling livestock, as well as fertilizers and seed. Pickups driven by a hired hand or farm worker qualify as commercial vehicles.

As you purchase any type of insurance, you must remember that an insurance policy is a legal contract offering an agreement between the insurance company and the policyholder. Disclosure of business usage of any type is necessary to keep the contract valid.

Failure to reveal business usage on a personal auto policy can leave you with doubtful coverage.

Quotations for Commercial Automobile Insurance

As with any type of insurance, one of the best ways of saving money on insurance is to obtain a selection of quotes within the insurance industry to compare prices. Getting a quote on commercial auto insurance is a bit more complicated than the average personal automobile policy.

Approach an insurance agent or a group of agents to obtain these quotations because they require a great deal of information. Agents ordinarily have the staff to handle these complicated quotes along with checklists to ensure that all the information is included.

Commercial automobile insurance policies vary from the local catering business with one van and a sedan to trucking companies with a multiplicity of vehicles. The following basic information is necessary to get a commercial automobile quote:

• Type of business to be insured
• Any state or international borders usually crossed by the vehicles
• List of drivers with full names, dates of birth, and license numbers
• List of vehicles with make, model, weight, and VIN numbers
• List of trailers that haul goods, if any, along with make, model, and serial number
• Usage of each of the vehicles – how far it ordinarily travels – if it hauls something, what it hauls
• Any current Public Utility Commission (PUC) filings or filings under the Uniform Commercial Code (UCC) – this usually applies to businesses with interstate business

Limits of Liability

Consult with your state's department of insurance to determine the limits of liability required by law. You can find links to states' websites by going to the NAIC website.

If you have a business, the limits of liability should be higher than those ordinarily recommended by states. Insurance policies provide coverage only for the amount written, including expenses incurred.

Suggested limits of liability for commercial automobile insurance:

• Bodily injury liability – your responsibility for injury to others if one of the business vehicles along with a listed driver is involved in an at-fault accident - $300,000 per person/$500,000 per accident
• Property damage liability – your responsibility for damage to the property of others in an at-fault accident

To round out this coverage, depending upon the size of your business, you should purchase an umbrella policy offering liability beyond that offered by liability policies. This specialized policy allows your business the protection of additional liability coverage.

Protection for Your Owned Vehicles

Commercial autos are protected in different ways than personal automobiles. Passenger-type vehicles used in businesses usually get comprehensive and collision just as they are in personal automobile policies. As with personal autos, a larger deductible can reduce premiums, so purchase as large a deductible as your business can afford.

• Comprehensive insurance – pays for damage to company-owned vehicles for the following: theft, weather, animal damage, vandalism, fire, and falling objects. Purchase a deductible of $1,000, depending upon the age of the vehicle.
• Collision insurance – pays for collision damage to company-owned vehicles from colliding with other cars, property, or parking lot damage. A $1,000 deductible is also recommended, again – depending upon the age of the vehicle.

Semi-tractors, trailers, and other equipment may be insured for specific damages, depending upon the needs of the business. Ask for suggestions from your agent because he or she has experience in this type of insurance. Furthermore, it is possible for coverage to be suspended for periods under certain circumstances.

This is true particularly of farm and ranch policies. Be sure you are aware of the conditions of the suspension of coverage to avoid having problems with insurance.

Examine the Companies That Provide Quotes

Make sure to look carefully at the insurance companies that provide your quotes to determine their financial stability and the complaints that have been levied against the companies. Both of these are matters of public record and can be obtained from the following sites:

• A.M. Best - one of the insurance rating and financial ratings sites
• National Association of Insurance Commissioners (NAIC)
• State Insurance Department for your state – to locate your state, go to this website

Saving Money on Commercial Insurance Quotes

The following conditions can save you money on commercial automobile insurance:

• Pay attention to the type of automobile you purchase
• Safety devices on automobiles
• Antitheft devices as well as automatic GPS locators
• Garaging within a secured facility such as a closed garage or fenced lot
• Fleet discounts – multiple vehicles can allow a percentage of discount
• Pre-employment drivers' checks – examine driving records of drivers before you hire them
• Maintenance plans for automobiles and trucks – regular maintenance and repair may earn discounts from insurance companies

Evaluating Quotations on Commercial Auto Insurance

Begin by comparing the quotes, making sure that they are not only for the same automobiles and trucks, but also for the same insurance coverage. Then compare premiums to determine the least expensive. Compare the results to your research about insurance companies.

Finally, examine the relationship you have with the agent or agency that tendered the quotes. An efficient, cooperative agent can make business insurance easier to manage.

You will be contacting the agent on a regular basis to add or subtract automobiles and trucks. A reliable agency is as necessary as a good insurance company.

Be sure to start your search using the FREE comparison tool below!