If your customer's company requires their employees to drive a lot, it may be worth it to them to investigate commercial auto insurance. Businesses want to make sure they have the best protection possible in case of an accident. This is especially true in Texas, a state that has the highest rate of traffic deaths. In 2018 alone, there were about 626,952 reported car crashes.
Coverage Under Commercial Auto Insurance
Coverage for this type of auto insurance typically takes the form of:
- Liability: This coverage protects commercial drivers in the event they harm someone else or their property while driving.
- Comprehensive: As with personal auto insurance, comprehensive insurance helps cover commercial drivers in the event of damage that occurs not related to a collision — such as hail, fire and vandalism.
- Personal Injury Protection: Known as PIP or medical coverage, PIP helps with medical expenses that result in an accident.
- Collision: This helps pay for repairs when a commercial driver strikes another car or object.
- Uninsured Motorist: This helps if a commercial client finds themselves in a wreck with a driver without insurance.
Commercial auto insurance doesn't always cover non-owned vehicles, which is a vital distinction to make. Non-owned vehicle coverage deals with instances where the company doesn’t own the vehicle in the crash — such as employees driving their own cars on company time.
Additional Coverages
These are a few additional coverages that can be added to a commercial auto policy.
- "Who Is An Insured?": This protects the liability for any drivers within subsidiary companies you own.
- Leased Vehicles: This covers damage to vehicles leased by the company.
- Personal Effects: This concerns theft and covers $500 for personal belongings stolen from a work vehicle.
- Additional Insured: This is temporary liability protection for anyone performing work for your company.
What If Your Customers Already Have Personal Auto Insurance?
If your customers already have personal auto insurance, it's important to let them know that this insurance won't necessarily cover them if they use the insured vehicle for work. This is especially true if they have multiple employees driving the vehicle. Personal auto insurance and commercial auto insurance involve some of the same coverages, but it grows complicated when the vehicles are being used for work. If your customer's employees wreck a vehicle while driving for business, not only will they receive backlash, but their business also will. A personal policy can only reach so far, which is where commercial auto insurance comes in.
What Affects Commercial Auto Insurance Rates?
There are many different factors that can influence commercial auto insurance rates, including:
- Vehicle Type and Value: Certain vehicles require more coverage than others. For example, your customers will typically want more coverage on a large van than on a small personal vehicle, especially depending on what the vehicle's value is.
- Number of Vehicles: Just like with personal auto insurance, policyholders must pay more for adding vehicles onto their policy.
- Number of Drivers: Having several drivers is a bigger risk than having fewer, so a growing number of insured employees may cause higher premiums.
- Travel Distance: This is another instance in which the insured risk grows. The further a business' vehicles travel for work, the higher the insurance cost may be.
- Insured's Credit: The credit history of each driver will be taken into consideration and can have an impact on a business' insurance rate.
How Much Commercial Auto Insurance Should Someone Buy?
How much commercial auto insurance your customer purchases depends on several factors, such as how many vehicles they need, what risks their vehicles may be at, and what they're transporting. Insurance for such vehicles as taxis or buses will have stricter requirements posed by state and federal — as they'll be carrying people. The same applies to the transportation of hazardous materials. Generally, your commercial auto customers will want enough coverage to take care of them, your employees, and their company in case of an accident.
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