How to tell if you need it, what it covers, where you get it, and how much it costs

Key takeaways:

  • If you use a vehicle for business purposes, you need commercial auto insurance. Your personal policy won’t cover you.
  • You might be surprised at what constitutes commercial use. Have you taken a client to the airport lately?
  • Commercial auto coverage is similar to personal coverage, but it has higher limits, covers a larger variety of vehicles, and offers an overall higher level of coverage.
  • Visit an insurance agent at Avante Insurance to discuss coverage needs

Commercial auto insurance is a must if you use vehicles in your business–whether you lease, own, or hire cars or trucks. “Business use” could mean driving to a work site, going to meet clients, or delivering products. You might also have employees who drive your vehicle(s). 

An important thing to know is that should you be in an accident while using your personal vehicle for business use, your personal policy is unlikely to cover any damages to people or property. Commercial auto insurance requires a separate policy if you regularly use a vehicle for your business, even if you are a small business or an independent contractor. And, if you move goods or people across state lines, federal law requires you to have commercial auto insurance. 

The line between personal vehicle insurance and commercial auto insurance can be a blurry one. Who really needs it? What does it cover? What about personal use of my business vehicle? 

Where can I buy it? How much does it cost? Let’s clear all of this up with a commercial insurance overview.

Commercial auto insurance: Who needs it?

If you use your personal vehicle now and then for business use, your personal policy should cover you, but it’s important to speak with your agent and give them the complete details so that you can make sure you’re covered. And, if your business owns or buys a vehicle, a commercial policy is required to cover you and any employees who drive it. Let’s look at who needs a commercial auto policy and some common scenarios you may not be thinking about.

You need a commercial auto insurance policy if the vehicle is used for work-related tasks like:

  • Sales calls
  • Delivering packages to a shipper such as FedEx or UPS
  • Shopping for and picking up office supplies
  • Driving clients to the airport or a work event

If you transport equipment or goods that you sell, charge a fee to ride in your vehicle, haul heavy tools, or tow a trailer used in business, you need commercial auto insurance. Some of these commercial uses are obvious, but even delivering lunch to your clients requires a commercial auto policy. Other reasons include transporting hazardous or flammable materials and using your vehicle as a chauffeur, taxi, or limousine service. Now that you know why you need it, what does a commercial auto insurance policy cover?

Commercial auto insurance: What it covers

You’ll notice that commercial auto policies mirror your personal auto policy. The major difference is that a commercial policy offers high claim limits, coverage for additional types of vehicles, and a higher level of coverage due to legal complexity. There also are a few things you should know if you operate a certain kind of business. The most common types of coverage in a commercial policy are:

  • Collision, which pays for accident-related damage.
  • Comprehensive pays for damage from non-collision causes including theft, weather, fire, or vandalism. This is what pays for broken windshields, among other things. 
  • Reimbursement for a rental car after an accident causes damage. 
  • Liability pays for injuries to people as well as damage to their property if you are found to be at fault, and covers legal expenses in case of a lawsuit.
  • Uninsured or underinsured motorist pays if an accident is caused by a driver that is underinsured or has no insurance at all. It covers damage to you and the passengers in your car, as well as property damage. 
  • Personal injury will pay for medical expenses and lost income for any accident-related injuries to occupants of your vehicle, no matter who caused the accident.  
  • Medical payments pay medical and/or funeral expenses for accident-related injuries or death to occupants regardless of fault.

Discuss your coverage needs with your agent. For some instances, you may be required to purchase additional coverage. Additional types of coverage are available too, including roadside assistance and towing services. Whatever you decide, a commercial auto policy is an important part of your total business insurance package

And, if you’re wondering if you are covered when you use your business vehicle for personal use, the answer is yes, but again, speak with your agent. Certain coverages may not extend to family members. For family use, additional coverage may be required. 

Commercial auto insurance: Where can I get it and how much does it cost?

No commercial auto insurance overview would be complete without discussing how you obtain a policy and how much it costs. Getting covered is easy – just reach out to your insurance agent. Once they sit down with you and gain an understanding of your business, they can recommend the best overall coverage for your business, including commercial auto insurance, and ensure you don’t have, and aren’t paying for, duplicate coverage.

When it comes to cost, several factors come into play, including:

  • The size of your business
  • How many and the type of vehicles you want to insure 
  • How many employees will be driving the vehicle(s)
  • The costs of the vehicles you hire 

Some other factors include business and driving risks and the amount of coverage you require. However, the average range for a business in the State of Florida is $2,565 to $3,370 per year, or about $214 to $280 per month. However, prices can vary widely depending on the insurance carrier, which is why it’s best to consult an independent broker. 

Avante Insurance: Contact us for the commercial auto coverage you need

One fender-bender in your personal vehicle while you are ferrying your clients to the airport can cost you far more than any commercial auto insurance policy. Without the right coverage, you not only risk the future of your business but your family’s future as well.

At Avante, we’ll work with you to build the commercial auto coverage you need with a deductible that works for you. Reach out today, because you never know what tomorrow will bring. At Avante, we’re always standing by.

This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.