How much does a commercial auto insurance cost? There are several factors which affect the price of commercial auto insurance; however, this also includes individuals who employ their vehicle for business purposes as well. For example, if you are a cab driver and your employer does not provide you with commercial auto insurance, it will drive a large premium. The same goes for truck drivers, whose companies either do not provide them or provide very low premiums. On the flipside, an individual business owner who employs thousands of drivers may be paying a much higher premium than his friends or colleagues who do not own a fleet of trucks or cars.
How is this possible? Well, as mentioned above, insurance companies charge a premium based on risk. If you are driving a brand new vehicle that has been only used a few times and has a clean record, you may be offered a lower rate. However, if you drive an older vehicle with a history of accidents and traffic infractions, you can expect to pay a higher premium as the company views you as a greater risk.
However, what happens when you use your motor vehicles for business? Do you have a fleet of vehicles? Will they all be covered by a single commercial auto policy? The answer to this question will determine how much you are charged for a monthly premium. In general, there are three types of policies that cover business motor vehicles;
General Liability Insurance: This is one of the most common policies used in commercial property insurance. This type covers damages incurred on a commercial property due to a third party’s negligence. It does not cover personal property of the person insured. General liability insurance provides coverage for liability caused by events such as: fire, theft, vandalism, or adverse weather. If the policyholder’s business creates or causes an environmental problem, it is required that they include a separate commercial general liability insurance policy. This can increase the cost of your premium.
Personal Injuries and Damage: If you have employees, you need to purchase personal injury and damage insurance to protect them from injuries that occur on the job. Personal injury and damage can include work-related injuries, medical expenses, pain and suffering, lost wages, and funeral costs. If your business uses trucks or delivery vans, you will need to add damage waiver and/or underinsured motorist provisions to your personal property policy. The cost of personal injury and damage can be significant. In addition, if you add this coverage to your general policy, you may also be asked to increase your deductible.
Underinsured Motorist Coverage: When you are shopping for insurance, you may also want to inquire about the addition of an underinsured motorist provision. Underinsured motorist coverage kicks in if you are in an accident with an uninsured driver. In order to get this coverage, you must add the cost of uninsured motorists to your policy. The cost of this coverage can vary depending on your specific company. However, generally speaking, underinsured motorist coverage has the highest premiums attached to it.
Bodily Injury Or Property Damage Liability Coverage: You may also want to ask your insurance agent whether you need to include bodily injury or property damage liability protection with your policy. Sometimes a liability protection will be included free of charge, but sometimes you will have to pay an extra premium. Usually, the price of bodily injury or property damage liability protection will be reflected as a flat rate, which means that the price will be the same no matter what company you select to carry your policy with.
Higher Limits of Coverage: Most commercial vehicle policies come with higher limits of coverage than private vehicle policies. Typically, the more coverage you have, the less your insurance premiums will be. Typically, companies recommend a minimum of liability coverage and then go from there. This means that you should ask your insurance agent about the higher limits of coverage that may be included in your policy.