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  • Writer's pictureJesus Gonzales

Commercial Auto Insurance: How it Works and Who Needs It

Updated: Oct 30, 2023


Who needs commercial auto insurance?


Commercial auto insurance is for those that own a business and use a vehicle for business purposes. Commercial auto insurance covers the car in case of accidents, which happens more than you might think. If someone's car is damaged or destroyed in an accident, they will likely need to pay for parts and labor to fix it. In some cases, the vehicle may even need to be replaced because of the damage.


Beyond that, commercial auto insurance also protects your business from liability issues if a staff member is involved in an accident with a customer's car. The company can also sue for damages if its client is injured due to negligence.


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What are the risks of not having commercial auto insurance?


Commercial auto insurance protects you and your business from financial ruin. Suppose you're involved in a car accident, or someone else is driving your car and causing an accident. In that case, commercial auto insurance liability coverage will help protect you and your company. It can pay for the medical expenses sustained by the other party, which could be a driver, passenger, or pedestrian.


The risk of not having commercial auto insurance is that your personal auto insurance policy may only allow the claim if you were using your vehicle for business purposes and were adequately disclosed and approved by underwriting. It can be a devastating loss to your personal and business financials.


It also includes protection against damage to or theft of your vehicle and the associated costs.


What is covered by commercial auto insurance?


Commercial auto insurance is a type of coverage available to most businesses and provides many benefits. For example, suppose you own an expensive town car like a Lincoln or Mercedes or even a large box truck. In that case, your commercial auto policy may cover the costs of the damages sustained in the event of an accident.


In addition to having this type of coverage, you'll also have some protection against legal action from other parties involved in the accident.


Commercial auto insurance uses deductibles to keep down your monthly payments. A deductible is the amount of money you agree to pay for any claims against your policy before it becomes eligible for a payout made by the insurer. The average deductible is $1,000, with most policies between $500 and $2,000. It's a small price compared to the damages sustained and the total loss paid by the insurer.


If you don't have an annual premium payment for these expenses, set aside enough monthly money to cover these expenses without going into debt!


What types of vehicles are covered by commercial auto insurance?


Commercial auto insurance covers private and commercial vehicles, including cars, trucks, motorcycles, and trailers. Car insurance typically covers bodily injury liability for the driver or passengers of a vehicle in the case of an accident. It also covers damage to other cars in the event of an accident. Some policies may also cover property damage liability incurred when a vehicle is involved in an accident.


Commercial auto insurance is often necessary to protect against lawsuits from injured employees while driving for your company. If you plan on purchasing a new company car or truck this year, ensure you get it covered by a policy protecting the vehicle, your business, and your employees.


How is commercial auto insurance different from personal auto insurance?


Commercial auto insurance is different from personal auto insurance. With a commercial policy, you're more than just someone who wants to own and drive a car around town. You have the needs of your business – employees, equipment, etc. – that must be covered by insurance. That's why commercial auto policies are more expensive than personal policies, with additional coverage for vehicles used for business purposes and carrying higher risks. The vehicle you use is also a factor in the cost of your commercial policy.


Your personal car doesn't need heavy industry-specific protection like your company truck. But even though commercial auto insurance has more coverage than an individual policy, it can still be customized to fit your business needs.


How much does commercial auto insurance cost?


Commercial auto insurance is a critical aspect of your business. It protects you from unforeseen circumstances that may take place on the road. You should purchase commercial auto insurance for each car or truck you own or lease. A typical policy costs $1,500-$3,000 annually and covers any vehicles used in your business.


The premium is determined by the type of coverage selected by your company- liability coverage or full coverage- and not just the number of vehicles covered in your policy. It's also your driver's, the number of drivers, and their driving history. These are only some factors taken into consideration when calculating your rate. Even if your company only owns one vehicle, it may be worth purchasing a policy so that you are at ease knowing your business is protected and can focus more on growing your business instead of fear of losing your business.


How do I get a business insurance quote?

Consult your Anchor Home Insurance advisor by contacting (623) 343-0212 or visiting anchorhomeinsurane.com.




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