Tag Archives: Commercial Auto Insurance

Who Needs Commercial Auto Insurance?

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Who Needs Commercial Auto Insurance? on avanteinsurance.com

Driving for business instead of pleasure

Most of us have auto insurance for our personal vehicles. In fact, it’s required in most states. Commercial auto insurance serves a different purpose, but for whom or what types of businesses? Do you need a commercial policy if you use your car for work? What if you work for a rideshare company like Uber or Lyft? We offer an overview and answer your questions about commercial auto insurance.

What is the purpose of commercial auto insurance?

As the name implies, this type of insurance is meant to cover vehicles that are used for business purposes. In most states, all drivers who have a registered vehicle must carry private liability, uninsured motorist, and no-fault car insurance coverage. States usually go further, requiring businesses that transport people or materials to have “at least the same minimum insurance requirements that apply to passenger cars or commercial vehicles,” according to the U.S. Department of Motor Vehicles (DMV).

The reason for the extra coverage is that most businesses have higher liability requirements in order to protect drivers, passengers, equipment, and other people/equipment in the event of an accident.

What does commercial auto insurance cover?

According to the DMV, “… commercial car insurance covers the same major coverage private individuals purchase…however, there are many add-ons more suited for commercial driving.”

This includes coverage for you, your employees, work equipment, and your business. Just like private insurance offers liability coverage to pay for medical expenses or property damage, commercial auto insurance serves the same purpose. The coverage amount and state requirements are usually higher than a commercial policy, however.

What types of businesses need a commercial auto policy?

When most people think of commercial auto insurance, they probably picture an 18-wheeler or a taxi. However, this type of coverage can extend to almost any business that transports people or goods, including:

•  Pickup and delivery services (materials, furniture delivery, packages, food delivery, etc.)

•  Messenger services

•  Taxi services

•  Limousine services

Other types of vehicles that might need a commercial auto policy:

•  Vehicles registered with a business, corporation or partnership

•  Vehicles that are rented or leased by others

•  Vehicles that are consistently driven by you or your employees for business purposes

•  Vehicles that are equipped with any of the following:

• Cooking/catering equipment (i.e. food trucks)

• Bathrooms

• Snowplow equipment

• Altered suspensions

• Hydraulic lifts

• Racing equipment

A commercial policy can cover cars, pickup trucks, SUVs, vans, limousines, taxies, flatbed trucks, and more.

What if you use your own car to make deliveries?

If you use your personal vehicle to deliver pizzas, you might need to consider purchasing commercial auto insurance. “Personal car insurance typically won’t pay to repair damage or treat injuries you sustain while you’re transporting people or goods for money, in large part because the liability and property damage risks are too great,” according to NerdWallet.com.

Do rideshare drivers need commercial auto insurance?

This is an area of growing concern in many states. Drivers for rideshare companies such as Uber and Lyft operate their own vehicles. Up till now, a commercial auto policy has not been required, but many states and local governments are beginning to adopt new policies. Even if your state or county does not require commercial insurance, it’s a good idea to buy the additional coverage.

Your personal auto policy might not cover activities that include transporting people. Some rideshare companies do provide commercial insurance to their drivers, but those policies might not be enough to cover your personal expenses and your liability if you’re ever involved in an accident that results in serious injury or property damage.

Should you consider any other type commercial coverage?

Aside from liability insurance – which is generally required for businesses in most states – you might also consider purchasing additional coverage, including:

Uninsured/underinsured motorist insurance – This policy helps protect your business vehicle if the other driver is not insured.

Personal injury protection (PIP) and medical payments coverage – This coverage helps pay medical expenses and/or lost wages as the result of an accident.

Emergency roadside insurance – Vehicles break down all the time, so it might be a good idea to consider protection that will cover battery charging/replacement, towing, tire changes, fuel delivery, and locksmith services.

Personal effects insurance – If a vehicle is ever stolen or personal items were taken from inside, this type of coverage can help employees pay to repair or replace them up to a certain dollar amount.

Commercial auto insurance is required for certain businesses and many more individuals should consider such a policy if their job requires transporting people, food, or other goods. If you have questions or you would like a quote, please contact Avante Insurance today.

Why Commercial Auto Insurance is Costlier

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Why Commercial Auto Insurance is Costlier on avanteinsurance.com

If you use your vehicle as part of your business, you’ll need to get commercial auto insurance–even if you already have a personal policy

When most people think about auto insurance, they think about personal auto insurance coverage. These are the kind of policies that cover most drivers who own, rent or lease personal vehicles. However, if you own or operate your own business, you might need a different kind of auto insurance; specifically, a commercial auto insurance policy for your vehicles.

While most large businesses and established corporations already have most, if not all, of their business vehicles insured, smaller companies, including recent startups, solo entrepreneurs and those operating home-based businesses may not have the coverage they need. Much of this might stem from a lack of understanding about how auto insurance works, or simply a desire to save money by avoiding paying for another insurance policy. However, not having commercial auto insurance can have serious consequences, especially if you get into an accident while operating your business.

To make sure you and your business aren’t at risk for financial disaster due to a lack of proper insurance, make sure you know the what, how, when, and why of commercial auto insurance. Being informed won’t only save you serious money– it can save you headaches, both now and down the line.

Yes, commercial insurance does cost more– but it’s a necessary investment

The average American car owner spends about $815 per year to personally insure their vehicle. In comparison, commercial car insurance policies usually cost an average of around $1200– $1600 per year– an up to 200%+ cost increase. For larger commercial vehicles, like trucks, vans, or limos, commercial auto insurance prices are often considerably higher. These relatively high rates often mean that the idea of needing an additional car insurance policy may come as a financial shock to many small business owners, but it’s something that almost every entrepreneur, business-owner, and many independent contractors need.

When exactly do you need a commercial auto insurance policy?

The line between needing an additional commercial auto policy and simply needing a basic personal auto policy can be awfully thin. For example, using your personal vehicle to transport yourself and two friends to a concert would likely be covered within the bounds of your personal auto insurance policy. However, if you were an Uber or Lyft driver using the same car, going to the same concert, and two passengers were paying you for a ride, you would likely need a commercial auto policy to completely cover yourself.

How are commercial auto insurance rates determined?

Much like personal auto policies, commercial auto insurance policy pricing is determined by a variety of factors. This includes the driving records of all individuals who are insured to drive a specific vehicle, the value of the vehicle, the driving locations and average driving distances of the drivers. In addition, commercial auto policies are often considerably more expensive when purchased individually. Businesses that want to insure several vehicles at once can often purchase group coverage at a considerable discount.

Home-based businesses and commercial auto insurance

Not all home-based business owners need commercial auto coverage, but many do. If you work solely from your home, you may not need a commercial auto policy. However, if you travel often to meet clients, close deals, or transport supplies, you’ll probably need a commercial policy. This is especially the case for those who operate on-the-go businesses that often involve driving to customers’ homes, such as massage therapists, hair stylists, personal shoppers, professional organizers and maid services.

Larger small businesses and commercial auto insurance

Business that specialize in transportation-heavy industries, such as trucking, construction, electrical, plumbing, or roofing work are especially in need of commercial auto insurance policies. For these types of companies, commercial insurance policies may be considerably more expensive, as vehicles and their drivers regularly carrying heavy equipment over long distances are at much greater risk for getting in an accident or experiencing other vehicular issues. Though these types of organizations may foot the largest bills when it comes to commercial auto insurance, they also receive the greatest benefit.

If possible, research commercial auto insurance rates before opening or expanding your business

Running a business, even a tiny one, can come with surprising expenses. That’s why it’s important to consider the costs of commercial auto insurance (and determine whether you’ll need it) before making any big business decisions. This includes opening a business, expanding a current business, or entering into an employment contract in which you’ll need to use your own vehicle for commercial purposes.

While commercial auto insurance might be more expensive than its personal counterpart, it’s a necessary investment in your business’s financial future. Personal auto policies will often simply refuse to cover accidents, breakdowns, and other expensive occurrences if a vehicle is being used for a commercial purpose. That means if you’re using a vehicle to run a business without commercial auto coverage, you might as well be completely uninsured (though that’s a bad idea as well). Regardless of what industry you’re in, good commercial auto coverage can protect you and your vehicles when it matters the most.

To learn more about how commercial auto insurance can help your business grow and protect you from unexpected disasters, contact Avante Insurance today for a free consultation.

Does Your Company Vehicle Qualify for Commercial Auto Insurance?

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It’s not about what you’re driving—it’s about why.

A common question that arises from business owners is whether or not their company vehicle qualifies for commercial auto insurance. It’s a valid question because there are many different scenarios to consider and a common misconception that personal auto insurance will suffice. So let’s review the guidelines and determine whether your vehicle qualifies.

Who needs commercial auto insurance? 

Many companies utilize vehicles to conduct their business, but do all of them need a commercial policy?  If any of these descriptions apply to your business, you should consider getting a commercial auto policy to ensure that you are covered should the unexpected occur:
 

  • You use your vehicle for pickup or delivery of products, supplies, materials, food items or messenger services
  • You transport customers
  • Your vehicle has some sort of equipment onboard like ladder racks or permanent toolboxes
  • Your vehicle is 10,000 pounds or more or has a load capacity of more than 2,000 pounds
  • Your employees drive your vehicles for work purposes

Why personal auto policies aren’t enough

Your personal policy was designed to protect you and your personal vehicle, which means the coverage that’s offered often does not extend to commercial use. It provides coverage for normal activity like commuting to work and school, shopping, driving in town and on road trips.

 

A commercial policy, on the other hand, is specifically designed to cover the increased liability you face when using your vehicle for business purposes. Things like employees, work related gear and equipment, and passengers are all considered within the commercial policy.

 

Despite what many people believe, your vehicle does not have to be a truck or van to be considered a commercial auto. Examples of vehicles covered with commercial policies include:

 

  • Utility vans
  • Flatbed trucks
  • Dump trucks
  • Catering and refrigerated trucks
  • Rented or leased cars
  • Vehicles with work equipment
  • Box trucks
  • Limos and taxis

What’s covered under a commercial policy?

When it comes to ensuring the safety of yourself and your employees, your products, your vehicle and the livelihood of your company, a commercial policy is essential for any business that is using automobiles in the work environment. Here’s what is covered:
 
  • • Your employees: Whether you have one or a dozen, whoever is driving or riding in your company vehicle will be covered
  • • Your equipment: When an accident or damage is inflicted upon any business equipment, it’s covered
  • • Your business as a whole: In the event that your vehicle is involved in an accident and your business is found liable, you’ll be protected against damages awarded in a lawsuit

What to look for in a commercial auto policy

Every state has different requirements so be sure to do some research and find a policy that satisfies all the criteria. Next, you want to make sure that you not only have the proper amount of liability coverage, but also that you consider the options that will ensure you are fully protected. Some additional elements you might want included in your policy are:

 

  • Uninsured or underinsured motorist
  • Personal Injury Protection (PIP) and medical payments coverage
  • Emergency Roadside assistance
  • Personal effects coverage
Determining whether or not your company vehicle qualifies for commercial auto insurance can be confusing, especially if you have a small business and you’re the only one driving it. But following these guidelines and talking to your provider should help you make the decision. Remember, it’s not about what kind of vehicle you’re driving, it’s about how you’re using it. If you are in need of guidance or would like to find out about the different options available for commercial auto policies, get in touch with us for more information.

How to Determine If You Need Commercial Auto Insurance

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Your personal auto policy may not cover you for business

You’re a business owner and have taken the time to cover your company in the event of unforeseen circumstances that may cause damage to your building, your inventory and your employees. But now you’re wondering if you need a separate policy that covers your company vehicle. Many self-employed workers, small business owners and start-ups are faced with the question of whether or not they need commercial auto insurance. After all, if you work for yourself, wouldn’t your personal auto policy cover you if you had an accident or some other event? Determining whether or not you need a commercial policy is not always easy. Here’s a guide to what factors you need to look at and how to make that decision.

 

1. Why are you driving?
The first factor to consider when deciding if you need a commercial auto policy is why you’re driving the vehicle. Your personal policy won’t cover you if you are:
  • Delivering goods or people and charging a fee
  • You’re conducting a service in your vehicle
  • You are carrying tools, equipment or towing a trailer that is used for business

2. Who’s driving?

Usually, a commercial policy is needed if both you and your employees drive the vehicle for business purposes. The policy will allow you to list those who are drivers so that they are covered in the event of an accident.

3. What are you driving?

Another important distinction can be made when it comes to the type of vehicle you’re driving. If you’re using any of the following vehicles, a commercial policy is highly recommended:

  • • Vehicles that have work equipment onboard or are outfitted with equipment
  • • Dump Trucks
  • • Refrigerated trucks
  • • Bucket and Catering Trucks
  • • Utility vans
  • • Limos, Taxis
  • • Flatbeds
  • • Rented Vehicles
  • • Leased Vehicles
  • • Vehicles that are leased by the business

4. Who owns the vehicle or who’s it registered to?

A very important thing to consider is who the vehicle is registered to. If it’s under your company’s name, a commercial policy is definitely needed. Even if the vehicle is in your name, as the owner of the company you need to consider how much time you’re spending using your vehicle for business. If the vehicle is being used mostly for business purposes, it won’t matter whose name it is registered to, you’ll still want to cover yourself with a commercial policy.

Exceptions

There are some exceptions where your personal policy will cover you even when you are using your personal vehicle for business. It depends on the type of business you’re conducting. For example, it’s okay if you’re selling Avon or Mary Kay products part time, or if you’re a real estate agent transporting clients in your car to showings, and other similar instances. It is best to check with your insurance provider to be sure.
Whatever business you are in, review these facts to help you determine if you need a commercial auto policy. If you are not sure, please give us a call and we can answer your questions, clarify the requirements and guide you on the right policy for your needs.

What You Need to Know About Commercial Auto Insurance

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The Facts About Commercial Auto Insurance

As a business owner, it’s important to make sure that you, your company and its employees are covered in the event of an accident. What you may not realize is that you need the same kind of insurance for the cars used in your business as you do for your own personal vehicle. Both large and small businesses require commercial auto insurance if they use a vehicle, such as a car or truck, for regular business operations.

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