What Is Commercial Car Insurance?
Investing in commercial car insurance would be wise if you are a business owner who needs to use vehicles to move merchandise. With commercial car insurance, you may be able to have protection in place when you or your employees are driving to meetings with clients, driving to work sites, delivering products, or transporting supplies and tools.
If your vehicles are not insured and there is an accident, then you will have to cover the expenses of the collision. These expenses can be incredibly high and could seriously impact your small business, and in a worst-case scenario, they may lead to the firm’s bankruptcy.
So, if you are considering taking out commercial auto insurance for your small business, you must understand the fundamental elements of a commercial auto policy. Once you understand the fundamentals of commercial car insurance, it will be much easier for you to compare coverage. This will allow you to make an informed decision and choose the right coverage for your business.
Commercial vehicle insurance is different from personal coverage. However, often you may merge it with a personal policy, which allows you to save money on the two. Also, you may have the chance to bundle it with different types of business insurance, including commercial property insurance and general liability.
What Does Commercial Auto Insurance Cover?
Commercial car insurance provides coverage for accidents and injuries you or your employees may cause during a car accident. If you or an employee hits another car, the commercial auto policy will take care of the damages caused to the other vehicle.
Commercial car insurance covers cars and other vehicles used for business purposes. The commercial auto policy covers any expenses related to an accident, including injuries, property damage, and deaths, up to the policy’s limits. If you decide to take out commercial car insurance, you may expect the policy to include:
Auto liability will protect you and your business by covering the expenses for the bodily injuries sustained or property damage caused that you may be liable for legally due to a car accident. The bodily injuries part of the policy covers the other party’s medical bills, lost wages, and any legal expenses that may arise if a lawsuit is brought to you.
Medical payments will pay any medical bills up to the insurance coverage limit. This covers you, your employees, and your passengers involved in the potential vehicle accident, no matter who is at fault. The medical payments will cover expenses if your health insurance provider does not cover them.
Comprehensive coverage may help pay for damages your vehicle sustains other than a car accident. These damages may include vandalism, theft, flood, earthquakes, fire, and other weather events. The comprehensive coverage includes animal accidents, such as if a bird damages your vehicle or another animal. This is subject to a deductible.
Collision insurance, the insurance policy will cover the costs if you hit another car, another car hits your car, or if the vehicle you drive rolls over, no matter who is at fault. If your car is financed or leased, collision coverage may be required. Collision coverage is subject to a deductible.
Uninsured and underinsured coverage
Uninsured and underinsured motorist coverage pays for any injuries you may suffer if your vehicle is hit by an uninsured driver and unidentified, depending on the state laws. The uninsured coverage will cover medical bills, loss of income, and additional damages owed to you or your employees, like expenses that worker’s compensation does not cover. And it also covers your passengers.
The underinsured motorist coverage protects you if the driver that hits you does not carry enough liability insurance. Unless you are in a no-fault state, in that case, each driver’s car insurance policy covers their respective losses.
Commercial vehicle policy
A commercial vehicle policy may also provide coverage for cars and other vehicles you borrow or rent and also includes coverage for the employees who use their vehicles for your business. A commercial auto policy may include additional coverage like labor and towing, rental reimbursement, and lease gap.
Nationwide Makes Insurance Claims Easy
With the Nationwide On Your Side Claims Service, you may expect to get:
A written guarantee on repairs
If you choose to use a repair shop from the On Your Side Auto Repair Network, all of the required repairs will come with a written guarantee that will last for as long as you own or lease the car.
A choice of qualified repair shops you can trust
You should know that the On Your Side Auto Repair Network only includes shops that have been pre-screened and pre-qualified for the highest level of service provided.
Best Commercial Auto Insurance FAQ
Q: What is commercial vehicle insurance?
While commercial car insurance shares many characteristics with personal auto insurance, it is expressly made for automobiles used by or for businesses. This can apply to personal vehicles and those you purchase for a company you operate.
Commercial car insurance may provide both liability coverage and collision coverage for company vehicles and their drivers. If you are in a collision, the former helps cover the other driver’s repair costs and/or medical expenses. The latter covers any repairs or medical expenses you acquire for yourself or your vehicle.
One benefit of getting commercial auto insurance for your company is that your rates are often deductible from your taxes is one benefit of getting commercial auto insurance for your company. You can deduct them as business expenses to perhaps lower your yearly tax liability. Tax deductions for personal auto insurance premiums are uncommon unless you use the vehicle for business. Even then, you might not be able to deduct the entire premium sum.
Q: How does commercial car insurance work?
Commercial vehicle insurance is created to cover situations unique to a company and its requirements. For instance, if you have employees who use business cars or trucks, you could need non-owned vehicle insurance as part of your insurance. A commercial policy that covers your vehicle is required if you are self-employed and only use it for business purposes.
Liability and collision damage insurance for commercial vehicles are both options. Your liability coverage limitations may exceed what you’d ordinarily receive from a personal insurance policy. That’s advantageous if you’re concerned that your company will face legal action as a result of a car accident involving you or one of your employees.
Commercial auto insurance may also provide coverage for other benefits in addition to liability and collision benefits. Accident-related personal injury claims or medical expenses. Or even theft, destruction of property, falling objects, or weather-related damage. Also, damage that is done by drivers who are either underinsured or uninsured.
Your coverage may also cover the contents of business vehicles. Consider the scenario where you operate a contracting company and use your work vans to transport tools or supplies. Your commercial auto policy might provide coverage if the van’s contents are stolen.
Q: What vehicles are covered by the commercial auto policy?
- The commercial vehicle insurance policy covers any vehicle your business borrows, owns, rents, or leases
- The commercial vehicle policy also covers vehicles your employees drive for your business or personal use; no matter if your business or the employee owns the vehicle
The types of insured vehicles include:
- Work vans
- Cargo vans
- Box trucks
- Pickup trucks
- Utility trucks
Q: Who needs commercial vehicle insurance?
You may require a commercial car insurance policy if:
- You need to use your vehicle to transport and deliver products
- You require higher liability limits due to the type of business you have
- Your employees drive the vehicle
- The vehicle is registered to your business
Some examples of different businesses that may greatly benefit from having commercial auto coverage are:
- Contractors like electrical, plumbing, excavation, and HVAC
- Retail stores that use vehicles for deliveries, advertising, events, and many more
- Wholesalers and distributors
- Food and beverage
Q: How much does commercial car insurance cost?
The costs of commercial auto policies are influenced by plenty of factors, some of which are:
- What is the vehicle’s make, model, and year
- What is the cost of the vehicle when new
- The gross vehicle weight, notably if the vehicle you drive is a truck
- The driving records of all the drivers of the vehicle
- How the vehicle is being used or what it is used for; some examples include traveling to and from work, visiting clients and job sites during the work day, and delivering supplies to your customers
- The claims history
- The coverage options with the limits and deductibles
- The number of commercial vehicles you intend to insure
Q: Do I need a commercial car insurance policy?
If you own a business that your vehicles are under, you will need commercial car insurance. Moreover, you will also need a commercial auto policy to cover any vehicles your employees own, lease, or rent, especially if they are driving the vehicles to conduct business for your firm.
Your personal insurance policy may be sufficient if you only use your car on rare occasions. However, if your vehicle is regularly used for business, you will need a commercial auto policy, whether you are a small business owner or are self-employed.
You will need commercial vehicle insurance if:
- You are driving people and products for cash
- You are logging high mileage for the business, like regularly driving to work sites and store locations
- You are transporting items for business purposes, including equipment and heavy tools
As a responsible business owner, you will want to avoid putting your firm at risk of being underinsured. If you choose the minimum auto liability coverage, you will put your business at risk. According to Nationwide, you need at least $500,000 in liability coverage for each vehicle.
Q: Can I customize my commercial auto policy?
Besides the previously mentioned coverage of the commercial auto policy, you may also customize it with some of the following components:
- Roadside assistance protects you if you get locked out of your car, your batteries die, or you have flat tires; these are issues that are not usually included in the coverage unless you customize the policy
- New vehicle replacement cost coverage helps replace your car under a total loss with a new or similar car; plus, it provides gap coverage for the amount you may owe above your vehicle’s value
- Hired vehicle replacement cost coverage provides coverage for comprehensive and collision damage to a vehicle leased or rented; and also covers additional contractual obligations to the rental or leasing company
- Auto loan or lease coverage covers the difference between the actual value and the unpaid amount on the vehicle loan
- Expanded towing covers towing beyond what is included in the standard commercial auto policy; it provides coverage for jump starts, towing, and minor roadside repairs
- Rental reimbursement pays for the rental car up to the limits of your commercial auto policy so that you can transport yourself after an accident
Q: Why choose Nationwide?
If you are a small business owner that needs to use vehicles for transportation of employees and products, you need commercial auto insurance. Nationwide is considered the best provider of commercial vehicle insurance. It is number one in Customer Satisfaction with Small Commercial Insurance. Nationwide provides insurance to over half a million small businesses all over the nation.
In conclusion, every small business owner should consider investing in commercial auto insurance if they use vehicles to conduct business. With a commercial auto policy, cars and other vehicles that are owned by your business will be insured against the risks of the open road. The commercial auto policy will provide coverage in the case of car accidents, medical expenses, legal fees, and more.
Moreover, you will protect yourself and your employees from paying out of pocket for any damages. You may also include your employees’ cars under the commercial auto policy if they are using them regularly for your business.
All in all, commercial vehicle insurance is a good investment for every business owner. If you have a small business, ensure that you get a commercial auto insurance policy for the vehicles you use.