Commercial Auto Basics

Do I need a commercial auto policy? Is it required? If you use your vehicle for business purposes, whether it’s driving yourself to client’s homes or transporting people or goods in your vehicle, you need commercial auto insurance.

The primary difference between personal auto insurance and commercial auto insurance is the increased liability risks that arise from operating a vehicle every day for business purposes. For example, if your truck is transporting cases of soda and you’re in an accident and the product spills all over the highway, you’re not only on the hook for your truck, but your customer’s product that has now been destroyed.

You may also need commercial auto insurance if your vehicle is used in any of the following ways: if your vehicle is registered or titled to a business (corporation, partnership, etc.), rented or leased by others, equipped with snowplow, towing gear, cooking or catering equipment, bathroom, altered suspensions, hydraulic lifts, or racing equipment; or if your vehicle is consistently driven by you or employees for both business and personal use or used to transport hazardous materials.

Your business owners policy does not provide for this exposure, so you will need to purchase additional commercial vehicle coverage if you use a vehicle for business purposes as described above.

What does a commercial vehicle insurance policy usually cover? Different states have different requirements, and like your personal auto policy, there are different types of coverage that can be included or omitted on your insurance policy, including:

• Liability coverage (bodily injury and property damage) < usually the minimum state requirement
• Underinsured/uninsured motorists
• Medical payments
• Physical damage
• Emergency roadside insurance
• Personal effects insurance

There are some common commercial auto coverage types out there, including:

Types of commercial auto insurance include:

• Business auto insurance.
• Truck insurance.
• Cargo insurance.
• Pickup truck insurance.
• Tow truck insurance.
• Van insurance.
• Dump truck insurance.
• Non-owned/hired liability insurance.

Insurance rates are typically based on type of vehicle, gross vehicle weight, radius of usage, name, age, and records of drivers. All of these factors are important and can have a large effect on what you pay. Contact us with your commercial auto insurance questions.

Resources: 
http://www.iii.org/publications/insuring-your-business-small-business-owners-guide-to-insurance/specific-coverages/business-vehicle-insurance

http://www.dmv.org/insurance/who-needs-commercial-auto-insurance.php

http://www.dmv.org/insurance/commercial-auto-insurance-minimum-requirements.php

https://www.esurance.com/insurance-resources/commercial-car-insurance-myth