Commercial Vehicle Insurance – A Brief Guide

Commercial vehicle insurance is the best way to maintain your peace of mind.

Owning a business gives you a great feeling, but it brings a lot of stress as well. 

From employees’ management to staying ahead of your competition, you need to look after many things. 

With so many things to do, would you like to take the stress of your unfortunate accidents? 

Probably, you understand that your business depends on vehicles and drivers. Unfortunately, accidents happen, and they will continue to happen. 

Getting insurance for company vehicles is the only way to protect your business from uncertainty. Let’s talk about commercial vehicle insurance in detail. 

What is Commercial Auto Insurance?

Before we proceed any further, it is important to understand the term. With so many insurance opportunities, it is easy to confuse them with each other.

Commercial auto insurance covers the expenses in case of an accident while an employee is using a company vehicle. From medical costs to property damage, it covers most of your expenses.

Here are a few events in which commercial vehicle insurance can save your day:

  • You or your employee are driving the company’s vehicle and get hit by another car.
  • One of your employees drives away from the road and hits a property resulting in damage.
  • While using a business vehicle, the driver hits a pedestrian. Thankfully, the insurance will cover the medical expenses of the pedestrian.

Confused about whether you need the insurance or not? Let’s find out who needs it the most.

Who Needs Commercial Vehicle Insurance?

Commercial auto insurance should be your top priority if you rent, lease, or own vehicles like trucks, cars, etc. 

Moreover, if your employees drive personal vehicles for business, you should get the coverage as soon as possible.

If your company has employees that use company vehicles, getting a commercial auto policy will give you complete peace of mind.

In short, almost every business needs this insurance to protect the company and employees.

Things Covered in Commercial Vehicle Insurance

Depending on the insurance provider and local laws, the insurance coverage varies. 

However, we have collected a list of commercial vehicle coverages. A business can choose any of these coverages that meet its requirements.

Property Damage Insurance

In case of an accident, this coverage helps you the most. Thankfully, it pays the expenses of the other party’s vehicle or property. 

Even if you damage a tree, it will keep you out of trouble.

In simple words, it will help you if you crash into a storefront or hit the mailbox of your friend’s house.

Bodily Injury Coverage

When you are responsible for a vehicle accident that results in injuries to the other party, you need to pay the medical expense. 

With bodily injury coverage, you don’t need to pay medical bills. From recovery wheelchairs to doctors’ visits, it covers everything.

In addition, it covers legal fees if the other party files a claim against you. This coverage will also pay lost wages to the other party if they can’t go to work due to injury.

In case of any death, this coverage will help you to pay their funeral expenditures.

Collision Insurance

Unfortunately, vehicle accidents tend to be costly. Generally, a collision results in vehicle damage and injuries as well. 

Thus, you should have collision insurance all the time to drive with complete peace of mind.

Let’s say you hit another car or a tree; the collision insurance will cover your expenses.

Medical Payments Liability

The insurance covers the medical cost due to an auto accident. From medical treatment to funeral expenses, it covers almost everything. Most importantly, anyone in the vehicle can enjoy the benefits of this insurance. However, it is important to mention that its availability varies by state.

Comprehensive Insurance

Vehicle insurance covers non-collision damages. Let’s say that you lost your vehicle in a natural disaster or become a victim of car theft. This coverage will keep you out of trouble.

Business vehicles are more vulnerable as employees tend to be careless. Since they don’t own them, they can forget to lock them properly. With comprehensive insurance, you can sleep with peace.

Underinsured Driver Coverage

Unfortunately, some drivers don’t get insurance or don’t have enough insurance. What if they get involved in an accident? Well, this coverage can save your day.

When you are involved in an accident with someone who doesn’t have insurance, this coverage will pay your expenses. Moreover, it will pay for the passengers in your vehicle.

Rental Car Insurance

Many businesses get rental vehicles to meet the demand. Have you ever thought, what if you suffer an accident? You need rental insurance unless your auto insurance already covers it.

Personal Injury Coverage

Have you heard of no-fault coverage? Well, this is personal injury coverage. 

It covers your wages, medical bills, or funeral costs in case of a vehicle accident. Most importantly, you don’t need to worry about who is at fault.

Non-Owned Vehicle Insurance

To meet the vehicles demand, businesses often hire vehicles. Unfortunately, road risks remain the same whether you are driving a personal or hired vehicle. Regardless you are borrowing, leasing, or renting a vehicle, this coverage will help you.

When you or your employees drive a non-owned vehicle for business, this coverage comes to rescue you.

Insurance for Equipment and Tools in the Vehicle

A commercial van or truck usually travels with some business-related tools or equipment. For instance, a plumber will travel with a range of equipment.

Is it covered in commercial auto insurance? No, it is not. If you want to insure tools and equipment, you may need to buy a business property insurance coverage.

Difference Between Commercial and Personal Auto Insurance

Being a company owner, it is your responsibility to get the right coverage. In an unfortunate event, it will keep you out of trouble. More importantly, it builds trust between the company and employees.

Now, you might be confused about personal and commercial vehicle insurance. Let’s discuss both terms to understand each of them.

Commercial Auto Insurance

If you plan to use a vehicle for business, you need to get this policy. Thankfully, it will cover your employees as well. However, they must hold a valid license.

Compared to personal vehicle insurance, it has higher limits. As shared earlier, it covers third-party damage as well. Hence, you don’t need to worry if an employee damages property while driving the company’s vehicle.

Personal Vehicle Insurance

If you are using a vehicle for personal use like going on a trip, going to the office, you have to get this insurance. Usually, it only covers your immediate family members. Generally, it has lower limits as compared to commercial auto coverage.

What is the Cost of Commercial Auto Coverage?

When it comes to commercial vehicle insurance, it is very difficult to predict the cost without having specific details. From your industry to the type of vehicles, there are many factors that impact the amount of premium.

Generally, contractor businesses like carpenters, plumbers, electricians, and others need to pay higher premiums. Here are a few factors that control the premium of your insurance.

  • Where are you located?
  • How much liability coverage do you need?
  • Type of your business
  • What type of vehicles do you have?
  • Driving history of your workers
  • What type of load may your vehicles carry?

Apart from these questions, your agent may ask more questions before concluding. Depending on your requirements, they will design a policy to protect your business from unfortunate incidents.

How to Purchase the Insurance?

When it comes to buying insurance, the process is extremely easy. Thankfully, you imitate the process by filling an online application. Otherwise, you can call your agent or visit the nearest office.

As mentioned earlier, they will ask a few questions to give you the exact cost of your commercial vehicle insurance. Once you pay the premium, your vehicles are covered immediately.

Tips for Buying Commercial Auto Coverage

When it comes to getting commercial auto coverage, you have a range of options. With so many options, it is easy to get confused. We have a few tips that will make the process fairly simple.

  • Begin your research with the insurance company. Shortlist a few companies and research them.
  • Always get enough coverage to protect your business. To make it simple, ask yourself what you can lose in case of an accident lawsuit against your business.
  • Don’t underestimate the “underinsured or uninsured coverage.
  • Never hesitate to get the help of an insurance agent. They can design a business auto insurance policy specific to your needs.

Frequently Asked Questions

We completely understand that you have questions about commercial vehicle insurance, and that’s why you read this article. We have compiled a few of the most frequently asked questions by business owners.

How High Should Your Commercial Auto Insurance Be?

Every state has set its own obligation about commercial vehicle coverage. In order to meet minimum requirements, you have to get property damage coverage, uninsured driver coverage, and bodily injury insurance.

Now, it depends on your budget whether you buy the minimum amount of insurance or go with a higher limit to protect your business.

Do Delivery Drivers or Rideshare Need Commercial Vehicle Insurance?

Both delivery and rideshare drivers face inimitable risks. Probably, this is the reason why many insurance companies don’t have a solution for you. 

However, if you are working for a restaurant or store, your business owner can get non-owned auto insurance.

For people who are working independently, you need to talk to your agent to extend personal auto coverage.

Do You Need Commercial Auto Coverage for Personal Vehicles? 

Keep in mind that commercial coverage only covers company-owned vehicles. Furthermore, your personal policy is highly likely not to cover business use as well.

In such a case, hired and non-owned auto insurance is the best way to go. It covers the vehicles that are not owned by the business. However, it is not mandatory by law.

How Quickly Can You Get Commercial Auto Insurance?

Thankfully, the process is fairly simple. Once you fill the online application, you get the quote immediately. 

The online application asks about your industry, number of employees, type of vehicles, etc.

If you need any assistance, you can call the helpline or visit the nearest office. Once you make your mind, you can submit the premium. Generally, it takes one or two days to finish the process and get insurance.

What if You Need More Insurance Later?

Fortunately, you don’t need to worry even if you get minimum coverage. You can always talk to your agent to extend the amount of coverage. However, you need to pay additional dues to extend your limit.

In addition, you can choose a high deductible to reduce the cost of your coverage.

How to Save Money on Your Business Auto Insurance?

Firstly, you can get a policy with low limits to pay the minimum premium. Secondly, you can bundle policies to become eligible for a discount. Usually, if you get all your insurances from one agent, they give you some discount.

Last but not the least, if you have any further questions regarding auto insurance, you can feel free to ask in the comments.

What’s the Takeaway?

Commercial vehicle insurance is the basic need of every business. In the modern world, almost every business uses vehicles. Your employees frequently commute to enhance your business. Hence, it is essential to have commercial auto coverage.

When you run into a person or property, it is extremely stressful. What’s more stressful is that you have to pay for repairs and medical expenses. With commercial vehicle insurance, you and your employees can drive with confidence.

Thankfully, you have so many options to protect your business. Depending on your industry, you can choose a policy that meets your requirements. Make sure that you read the agreement carefully to avoid any trouble at a later stage.


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