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Commercial Auto Insurance

What is Commercial Auto Insurance?

Commercial Auto Insurance is for business owners who own or lease vehicles for use in their business.  Businesses use all types of  vehicles, a car to drive from client to client, a pickup truck to transport tools & equipment or a box truck to deliver goods to clients, all of these exposures are insured on a business auto policy. A business auto insurance policy protects your small business from property damage and bodily injury liability claims arising out of the use of autos in your business operations. This type of policy can provide coverage not only for third party liability but also covers damage to your vehicle by purchasing (fire, theft, flood) and collision coverage. Coverage can be added to include permanently attached equipment (tool box, ladder & rack), rental car coverage, special audio & video devices installed and depending on your state’s law, No Fault or Personal Injury Protection coverage may be included as well.

Why do you need it?

In many cases, people end up using their private vehicles for business purposes. Your personal insurance policy may not cover the business use of your personal vehicle.

Major reasons you need to get auto insurance for small business are as follows:

It’s the Law

All States require some type of auto insurance regardless if the use is personal or for business. Whether it is Personal Injury Protection (PIP), No Fault coverage, Property Damage Liability or Bodily Injury Liability, to register a vehicle in a state you must meet that state’s statutory requirements to get it licensed.

Financial Protection

Unless a business doesn’t mind paying their bottom line when an at fault accident happens (and they WILL happen), a business auto policy is needed.  Ownership of a vehicle creates liability for the owner of that vehicle.  Any business that owns a vehicle would be held legally liable for any damage to property or persons caused by an owned vehicle.  One accident creates many individual claims, there is the damage to your vehicle, damage to the other vehicle(s) involved, not to mention bodily injuries to drivers and passengers in all vehicles. Any business that owns a vehicle of any type  requires a comprehensive, customized Commercial Auto Insurance Policy.

Contractually required

Any vehicle that is financed or leased requires at least Comprehensive and Collision coverage and leased vehicles also require auto liability insurance.  Business contracts with your clients often require business auto liability insurance.

The Coverage Sections

Bodily Injury Coverage:

Pays for bodily injury to others due to an at fault accident. If someone is badly injured in a collision, sometimes, the claimant will seek legal counsel and file suit against the business. The business owner will need his auto commercial insurance policy to provide legal defense for his business in court as well as pay for the damages awarded.

Property Damage Liability Coverage:

Pays for damage to the other person(s) vehicle or property caused by an at fault accident. Typically, these types of claims are handled outside the legal system and insurers pay the owner to repair or replace the damaged vehicle, whichever is less.

Medical Payment Coverage:

Pays for medical expenses not already paid out of Personal Injury or No Fault coverage for the injured driver and passengers regardless of fault for the accident.  When No-Fault or PIP coverage pays 80% of the medical expenses, medical payment coverage can pay the additional 20% of medical bills or pay additional medical cost once PIP or No Fault limits are exhausted.

Collision Coverage:

Pays for damage to your vehicle caused by an accident whether you are at fault or not. Damage to your vehicle will be covered once your vehicle is insured for collision and, if you purchase rental car coverage, you will be reimbursed to rent a car to use while yours is in the shop.

Comprehensive Physical Damage Coverage:

Covers damages to your vehicle caused by floods, fire, theft, vandalism and other perils not including collision.

Uninsured or Underinsured Motorist Coverage (UM or UIM):

Depending on your State’s law, this coverage may be available to purchase to pay for bodily injuries and property damage caused by an at fault, uninsured or underinsured driver.   In some states, Uninsured Motorists coverage is only available for bodily injury caused by an at fault driver. Underinsured means the at fault driver had insurance but it was insufficient to pay for the bodily injury or property damage suffered.  In those cases, once the underinsured driver’s liability insurance limit is exhausted, you would be able to put a claim in on your own auto policy for unpaid damages.

Personal Injury Protection/No-Fault Coverage:

This coverage also varies by state and is intended to avoid litigation arising out of bodily injuries caused by auto accidents.  A state required limit is purchased to pay for medical care for injuries to driver & passenger of the car insured regardless of who caused the accident. This coverage can also pay for wage loss due to injuries (a percentage of earnings), transportation expenses and other necessary care needed after an accident.  In some states you can increase the limit purchased and increase the percentages paid for wage loss.

Also, CheckAuto Insurance Requirements in Alabama

Provisions to Be Noted

What is covered?

Commercial Auto Insurance coverage provides coverage for different types of vehicles used for business purposes. The overall coverage for this insurance includes bodily injury and property damage liability, comprehensive and collision coverage for your insured vehicle, Personal Injury Protection or No Fault Coverage for medical expenses for injury to driver and passenger(s)in your vehicle.

What is not covered?

Every insurance policy has its exclusions which you should read to clearly understand. It is important to know what will not be covered in the insurance policy before buying it. Exclusions and coverage are situational and can vary amongst insurance carriers. For example, theft of permanently attached equipment like a stereo or DVD player, rental car coverage, towing are options and would not be covered unless a specific endorsement is purchased. Some policies do not provide coverage for permissive driver use of vehicles, meaning that unless the driver is scheduled on the policy there is no coverage. For instance, if a business owner lends a vehicle to someone who is not listed on the policy as a driver, who then gets in an accident, you will have an uncovered claim.

Why Choose Us?

We present you with options from insurance companies that offer excellent products and services at competitive rates.  Our platform allows you to choose the best-suited insurance options for your small business. Our job is to match your business small business auto insurance needs with top insurers for your industry. We strive to educate our clients about the benefits of commercial auto insurance, insurance buying process and coverage available from start to finish. After an in-depth review of your insurance needs, we will recommend the policy and coverage that will provide your business with the protection you want. Get in touch with us to get the best quote for commercial auto insurance online.

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