Commercial Auto Insurance
If you’re a business owner, you may have seen the commercials for commercial auto insurance.
Why do businesses need commercial auto insurance?
If you’re a business owner, you may have seen the commercials for commercial auto insurance. The idea behind commercial auto insurance is that it will protect you from any loss that may occur when your car or trucks are being used on your business’ behalf. Commercial auto (CA) insurance covers some or all of the liability you face when renting, selling or otherwise transferring property & people to, or from, your business or operations.
The most common type of coverage is liability coverage, which covers claims against your business for accidents occurring while your vehicles are being used for business purposes. This is generally the most expensive part of insurance, although a wide array of other coverages is available, including coverage for rented vehicles, comprehensive and collision (to repair your owned vehicles) and even business interruption insurance.
Why do businesses pay for commercial auto insurance?
When you buy or lease a vehicle for your business there are a number of reasons why the cost to purchase commercial auto insurance for business use is greater than for private use. Here is one example: Your car may vehicle over a cliff causing the loss of life and critical product as part of your delivery efforts, in this tragic example the loss of life will likely be covered under your workers compensation policy, but for illustration lets consider the lost material.
If the commercial auto was a semi truck carrying $5M worth of customers products, this would be a costly claim . Most people have no idea that the cost of commercial auto insurance is significantly higher than the cost of personal auto insurance due to the risk involved with business activities.
What are the different types of commercial auto insurance?
If you’re an owner of a small business or an entrepreneur, or if you have a car that has been used in many ways or over a long period of time, it doesn’t matter where in the world you reside. Everyone needs auto insurance. A recent study of 1,500 business owners that own cars, showed that 73 percent of them have a commercial insurance policy.
But what type of coverage do they offer, and which insurance companies are they insured with?
Different types of commercial auto insurance
All states have their own definitions of what constitutes “commercial auto insurance” and different insurance policies for auto use within business or commercial enterprises. States also have different requirements for drivers’ liability insurance. Because of state requirements, many auto insurance carriers offer a wide range of coverage for commercial drivers. Check out our lists below to determine your state’s requirements and coverage options. Use this comparison tool to determine your options:
Car rental insurance
Rental agencies may offer only high limits on liability, as these are required by law. Most agencies offer liability insurance with a range of limits (e.g., $300,000/$500,000/$1,000,000/$2,000,000/$5,000,000) that can vary depending on the rental agency, the length, condition and use of the vehicle, and the size of the liability policy.
Also keep in mind that you may be required to purchase a liability coverage. When you rent a vehicle, be sure to ask about your insurance coverage in the rental agreement or through your rental application or check the rental company’s policy.
Auto insurance as a self-employed business
Covering your auto that is used for both business and personal exposures can be tricky, however, many carriers offer the ability to cover your work activities (depending on the type of work). In the instance where your job duties are a little more risky (in the insurers eyes) you may have to purchase a commercial auto insurance policy.
What are the commercial auto symbols?
Commercial Auto insurance is written on a “Symbol” basis, these symbols are standard across all carriers and help insurance agencies and their customers properly account for the type of coverages desired. Review these carefully with your insurance agent to ensure that you have proper coverage.
1 = Any “Auto”
This is the broadest symbol designation and covers any “auto.”
2 = Owned “Autos” Only
This symbol covers any “auto” owned by an insured, including any “auto” that is acquired after the policy begins. The symbol also applies to any “trailer” while it is towed by an owned vehicle.
3 = Owned Private Passenger “Autos” Only
This symbol covers only private passenger type “autos” owned by the insured, including any private passenger type that may be acquired after the policy begins.
4 = Owned “Autos” Other Than Private Passenger “Autos” Only
This symbol covers all “autos” other than private passenger type “autos” (vans, trucks, motorized equipment) owned by an insured, including such vehicles that may be acquired after the policy begins. The symbol also applies to any “trailer” while it is towed by an owned vehicle.
5 = Owned “Autos” Subject To No-Fault
Any “auto” owned by an insured that is garaged or licensed in a state where no-fault benefit laws exist. This symbol also applies to any “auto” acquired after the policy begins.
6 = Owned “Autos” Subject To A Compulsory Uninsured Motorist Law
Any “auto” owned by an insured that is garaged or licensed in a state where drivers are required to carry uninsured motorist coverage. This symbol also applies to any “auto” acquired after the policy begins.
7 = Specifically Described “Autos”
Only those “autos” that are specifically listed on the policy are covered. The symbol also applies to any “trailer” while it is towed by a listed vehicle.
8 = Hired “Autos” Only.
This symbol covers only those “autos” that an insured leases, hires, rents, or borrows. HOWEVER, it does NOT include “autos” leased, hired, rented, or borrowed from an employee, partner, or member of an insured’s household.
9 = Nonowned “Autos” Only
This symbol covers only those “autos” an insured does not own, lease, hire, rent, or borrow that are used in the insured’s business, including “autos” owned by employees, partners, or members of an insured’s household, but only while those non-owned “autos” are used either in the insured’s business or personal affairs.
19 = Mobile Equipment Subject To Compulsory Or Financial Responsibility Or Other Motor Vehicle Insurance Law Only
This symbol only applies to land vehicles that are considered mobile equipment under the policy’s mobile equipment definition. It allows extension of coverage for vehicles in states that confer vehicle status by making certain types of self-powered equipment subject to registration/licensing law.
Business or personal auto insurance is important because many people don’t make informed choices when selecting insurance carriers or policies. You cannot do all the research yourself and you will not be fully protected. Because of the different types of coverage it is important that you counsel an independent insurance agency such as Betters Insurance that can cover the vehicles appropriately.