Call Us Today (732) 295-5584
Home » Commercial Auto Insurance 101
November 5, 2020

Commercial Auto Insurance 101

If you are self-employed or own a company, chances are you use vehicles for daily business operation. But do you know if you have the right auto insurance? Sometimes personal car insurance will not protect you from the unexpected. Before you take your vehicle out on your next business excursion, you’ll want to figure out if commercial auto insurance is right for you. 

Commercial auto insurance, also known as business auto insurance, provides protection against both property damage and liability for any vehicles that are used for business. This insurance will help you cover financial costs resulting from an auto accident if you or an employee is at fault. 

Most states require business owners with vehicles to carry liability coverage. In fact, New Hampshire is the only state that does not mandate commercial auto insurance. New Jersey requires an auto insurance minimum of $5,000 in property damage and $15,000 in personal injury protection. 

Commercial Auto Insurance VS Auto Insurance 

There are many differences between commercial and personal auto insurance. Mostly you will notice a difference between coverage amount and reasons for coverage. Businesses inherently carry many more risks than an individual would, therefore their liability limits will be higher.

Commercial Auto policy helps protect your business with:

  • Property and liability trailer exposure

  • Additional insured requirements

  • Higher liability limits

  • Loading exposure

  • Hired-vehicle coverage

  • Non-owned vehicle coverage

Commercial auto insurance can cover vehicles that are not owned by the company. By choosing this endorsement, your business can cover rental and employee-owned vehicles with the same liability protecting the vehicles you own. This results in better protection of your business. 

Who Needs Commercial Car Insurance? 

It can be difficult deciding which insurance policies are right for your business. To decide if this coverage is right for you, consider how the vehicle is used, who owns it, and the type of vehicle. 

If your business ows or uses vehicles for daily operations, you will most likely want a commercial auto policy for protection. You may use your vehicle for:

  • Going to job sights

  • Going to appointments

  • Delivering goods

  • Carrying equipment

  • Transporting of people (taxi, uber, limo)

  • Using your vehicle to tow others

  • Trucking and freight transportation

If your vehicle is owned by a business you will need commercial car insurance. However, if you are the sole owner of your vehicle you may only need personal auto insurance. If you are only using your vehicle to transport you to work, for example, you will not need commercial auto insurance. You typically need it if: 

  • Your vehicles are owned or leased by a business

  • You vehicles are leased or rented to others

  • Your vehicles are registered to a business

  • Employees use your vehicles regularly

More specifically, commercial Auto Insurance is strongly recommended whenever employees: 

  • Use a vehicle to transport goods

  • Use vehicle to transport people

  • Use vehicles to carry equipment. 

  • Drive company cars for both business and personal use

  • Drive their own vehicles while conducting business

  • Drive company owned or rented vehicles

In addition to the ownership and purpose, the size and weight of your vehicle also determines whether you need commercial auto insurance. Large heavy duty trucks often cause much more damage in accidents. Therefore, they require special types of insurance coverage. You will need commercial auto insurance if: 

  • Your business uses a dump truck, tow truck, semi or trailer

  • Your vehicle exceeds a weight of 10,000 pounds

  • Your vehicle has installed equipment 

  • Your vehicle is used to plow snow

  • Your vehicle has altered suspensions

How Much Does Commercial Auto Insurance Cost?

Commercial auto insurance costs vary widely depending on a number of factors. The following  will impact the price of your coverage: 

  • Cargo types 

  • Distance being traveled

  • The value of your vehicle

  • The type of vehicle 

  • The number of vehicles your business uses 

  • The purpose of the vehicles

  • Associated business risks

  • Amount of coverage needed

  • Credit History

  • Loss History

If you’re still unsure whether you should invest in commercial auto insurance, it is best to contact an agent directly. They will answer any questions and help you understand what coverage works best for you and your business. Call us today at 732-295-5584. 

This web site may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting or tax advice.

You may wish to consult a competent attorney, tax advisor, accountant, or your own financial advisor. EMC Insurance Agency & Financial Services LLC dba I & E Insurance Agency & Financial Services is an Independent Insurance Agency, a Member of the Trusted Choice, Independent Agents of America & PIA contact your own advisors before making any financial decision. Services offered through independent NON-AFFILIATED ENTITIES

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

©2023. All rights reserved. | Powered by Zywave Websites