A Commercial Auto Insurance Primer

Intro

Commercial auto insurance is also sometimes called commercial car insurance, truck insurance, or fleet insurance. By whatever name, it is a policy that covers physical damage and liability for situations arising out of the use of business automobiles. Commercial auto policies protect everything from large corporate fleets to single cars used by the self-employed.

Why you might need commercial vehicle insurance

Personal auto polices may not cover the business use of your car. In fact, certain vehicle types or business uses may be specifically excluded from your personal auto insurance policies. Moreover, small businesses often need certain coverages that are only found in a commercial auto insurance policy. For example, you might need commercial auto insurance if you

• Use your car to perform a service or deliver a product
• Transport people for a fee in your vehicle
• Require higher policy limits due to the nature of your work
• Use a trailer, or haul a lot of weight
• Have employees who drive the vehicle(s)
• Have vehicles owned in the name of the business

What commercial auto policies cover

Commercial auto insurance policies can cover a wide variety of things:

Collision insurance: This pays for damage to your vehicle if it hits another car, or if another car hits you, regardless of fault. If your vehicle is financed or leased, collision insurance will be required.

Liability insurance: Liability insurance covers bodily injury, health care costs, lost wages, and property damage to others if you are at fault. It also pays for your legal expenses if you are sued as a result of an accident.

Comprehensive liability insurance: This pays for damage to your vehicle(s) for causes other than an accident, such as hail, flood, earthquakes, fire, theft, or vandalism, etc.

Underinsured motorist coverage: If you get in an accident and the other driver is at fault but does not carry enough insurance to cover your losses, this is what you would want.

Uninsured motorist coverage: This pays for your injuries or property damage if an uninsured driver hits you.

Add-ons

Beyond these basics, commercial auto policies can be customized with the following coverages, also known as endorsements:

Roadside Assistance: As with your personal auto policy, commercial auto roadside towing can include assistance with being locked out, jump starts, minor roadside repairs, and flat tire assistance.

Expanded towing: If your car or fleet drives long distances, then you may want towing coverage beyond what is covered by a standard business auto policy.

Rental reimbursement: Pays for a rental car.

Medical payments or personal injury protection coverage: This endorsement can cover medical expenses when your basic medical insurance does not.

New vehicle replacement cost coverage: If your car is totaled, this covers the cost of replacement with a new or comparable vehicle, including gap coverage.

Lease and rental coverage: This would cover comprehensive and collision damage to a rented or leased car.

Hired Auto and Employer Non-Owned Auto coverage: Hired Auto coverage provides liability and physical damage coverage for accidents involving vehicles rented by your business. Employer Non-Owned Auto coverage provides liability coverage for your business if an employee while driving their own car on company business, gets in to an accident and injures someone or damages their property.