If you are using a vehicle for use in your business, you must carry commercial automobile insurance. The coverage on a commercial vehicle, is almost the same as the insurance provided by a personal vehicle.
Commercial Insurance is required all vehicles used in your business. If you have more that 4, you would probably qualify for Fleet Insurance. It insures all the vehicles on one policy and depending on the insurance company, the premium for the policy can be much lower than insuring them separately.
Type of Vehicles
There are many types of vehicles that can be insured under a fleet policy. A few examples of these would be, delivery trucks, dump trucks, tractor trailers, cars, tow trucks and the list goes on. If you have a large company with various types of vehicles, it may be worth splitting them up in groups. An example would be – all tractor trailers on one policy and all your delivery trucks on another policy. This is a great way to make the most of all the discounts being offered on a fleet policy.
What is the Difference – Commercial or Business Vehicle?
If you own a business and drive your vehicle everyday for work, it would be considered business use. This would also include any cars driven by the owners, sales people, managers etc. If you need to make use of a vehicle (s) to complete the work you have been hired to do, it would be classified as a commercial vehicle.
What Kind of Coverage is Available on Commercial Auto Insurance Policy?
Commercial automobile insurance is really no different than personal insurance. The vehicles are rated differently because of their use. All the mandatory laws set out for personal insurance applies to a commercial vehicle. There are different endorsements that can be added to the policy to extend the basic coverage to include your needs. Mandatory coverage would include-
- Third party Liability -This is the most important insurance you need to operate your vehicle. It is mandatory but without it, one accident could cause financial ruin for both your business and your personal business. You need to carry the highest limit of liability available. It insures you for any damages or injuries that you have caused another driver.
- Accident Benefits coverage – Accident Benefits coverage is mandatory coverage which provides compensation for any type of injury that may be needed after an accident. It does not matter who is at fault, your insurance company will automatically respond to any need required for injuries. It would include medical and rehabilitation, loss of income, disability or death. Accident Benefits vary by location, and may be unique to your area.
Uninsured or Underinsured
The uninsured – If you are involved in an accident with someone who has no insurance, your policy will pay for what ever coverage is required. Underinsured is being involved with another driver who carries the bare minimum coverage available. There are endorsements available that can be added to your policy to increase the coverage to the limit you have on your policy.
Direct Compensation – Property Damage
Direct compensation is coverage is used for an accident that is not your fault. There is no deductible required for repairs.
If you are involved in an at fault accident, you would use your collision coverage to pay for repairs of your vehicle. It is subject to your deductible. This is an optional coverage, unless you have financing or are leasing a vehicle, then it becomes a mandatory coverage.
Comprehensive coverage, like Collision, is optional unless you have financing or leasing on the vehicle. It protects your vehicle against loss or damage resulting from something other than a collision like, Fire, theft, flying objects, vandalism and windshield.
Family Protection coverage
This is the endorsement required to extend your coverage up to your own limits of coverage if the other party has base limits.
Commercial – EXTRAS
There are specialized endorsements that can be added to your policy depending on what the use of the vehicle. An example would be – cargo being shipped across the border or additional rules on machinery and/or equipment.
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