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Why Do You Need Commercial Auto Insurance?

If you use a vehicle for business purpose, whether you own the business or not, it is likely that your personal auto insurance doesn’t cover you and the car in these situations. You need to have commercial auto insurance

What is Commercial Auto Insurance?

Simply put, commercial auto insurance covers any vehicle used during the course of your business. If you own a trucking company, or have employees making deliveries, you’ll need commercial auto insurance to protect against accidents and injuries. Even if you have a personal auto insurance policy, you’ll still likely need commercial auto insurance if you’re running a business or have employees. 

Commercial vehicle insurance protects against physical damage and liability for situations not covered by your personal auto insurance policy. This type of business insurance covers many types of commercial vehicles—from automobiles used for business purposes, including company cars, to a wide variety of commercial trucks and vehicles.

What Kind of Vehicles are Covered by a Commercial Auto Insurance Policy?

Most any kind of vehicles can be covered. Box trucks, food trucks, work vans and service utility trucks are just a few examples of larger commercial vehicles which will require a commercial auto insurance policy. This is sometimes called commercial auto insurance, commercial car insurance, truck insurance, or fleet insurance. While commercial vehicle insurance is most commonly associated with trucks or work vehicles, regular cars and automobiles may also require a commercial auto policy if they’re used for business purposes.

Why do You Need Commercial Auto Insurance?

Because personal auto insurance doesn’t cover business vehicles, and you’ll want to be covered in case of accident or injury. If you own a business that uses any sort of vehicle, you’ll more than likely want commercial vehicle insurance to protect yourself against damages. 

What does Commercial Auto Insurance Cover?

Commercial vehicle insurance, like your personal auto policy, provides similar coverages for liability, collision, comprehensive, medical payments (or personal injury protection) and uninsured motorist coverage. Each policy is different, and some commercial auto policies might not cover things that another policy will protect against. Below are some specific protections you can get with commercial auto insurance. 

  • Bodily injury liability coverage – pays costs incurred due to bodily injury or death resulting from an accident for which you are at fault. In most cases this coverage also provides you with a legal defense.
  • Property damage liability coverage – Protects and compensates you if your vehicle accidentally damages another person’s property.
  • Medical payments – no-fault or personal injury coverage – usually pays for the medical expenses of the driver and passengers in your vehicle incurred as a result of a covered accident, regardless of fault.
  • Uninsured motorist coverage – pays for your injuries and, in some circumstances, certain property damage caused by an uninsured or a hit-and-run driver. In some cases, underinsured motorist coverage is also included. This is for cases in which the at-fault driver has insufficient insurance.
  • Comprehensive physical damage coverage – pays for damage to your vehicle from theft, vandalism, flood, fire, and other disasters.
  • Collision coverage – pays for damage to your vehicle when it hits or is hit by another object.

Final Thoughts

Knowing what commercial auto insurance covers is an important first step. But equally important is knowing the costs and companies that can provide you with the best coverage. Keep reading to learn what affects the cost of commercial auto insurance from state to state, and which insurance companies can help you get the best rates for your business.

>>MORE: How Much does Commercial Auto Insurance Cost?

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