Should I Insure My Vehicle with Commercial Auto Insurance?


Whether you operate a large business with a fleet of semi-trucks or you are a home-based business with only one vehicle, all businesses should have commercial truck insurance.

The biggest misconception surrounding this insurance type is that it’s a codeword for semi-truck insurance. Commercial vehicle insurance covers everything from a large semi-truck to a small car used for deliveries.

Investing in protecting your assets with this form of coverage is crucial, and here are some reasons.

Why Take Out Personal Auto Insurance?

A surprising number of businesses choose to use an ordinary personal auto insurance policy instead of a commercial policy because of the lower costs.

Personal auto insurance is cheaper because of the lower liability limits and fewer choices of add-ons. On the other hand, commercial auto insurance is fully tailored to the business, with a wide selection of add-ons, which may even be specific to your industry.

The truth is that this is a mistake many businesses learn the hard way. If you exceed your coverage limits, any remaining costs will come out of your own coffers. For most small businesses, paying legal fees and medical bills, especially if they’re substantial and ongoing, could lead to a bankruptcy declaration.

If you’re wondering whether you want to pay a few dollars more for commercial auto insurance, here are some great reasons why this is a smart idea.

Personal Auto Insurance Lacks Coverage

Approximately 216 million drivers possess car insurance in the U.S. Unfortunately, many of them are using their vehicles for business and assume that a conventional personal auto insurance policy will cover them. Unfortunately, that is not the case.

Typical auto insurance policies have far lower liability limits than are needed for businesses. The coverage is extremely narrow and won’t cover you in most circumstances.

More importantly, many car insurance providers will automatically void your policy if a vehicle is used primarily for commercial reasons.

Commercial Auto Insurance is Customizable

Personal auto insurance is standard and comes with few options. On the other hand, commercial auto insurance is fully customizable to provide the ironclad coverage you need.

Most commercial plans will cover property and cargo damages, liability coverage, and medical payments. These are the basics, but if you need additional protections, you’ll need a commercial policy to access those optional add-ons.

Your Employees Will Be Protected

Personal auto insurance plans will not pay out if a non-named driver piloted your vehicle at the time of an accident. It means if you have employees and they’re driving your vehicle, they’re going unprotected.

Commercial auto insurance is designed to cover employees while driving your business vehicle. Additionally, your policy may extend to your employees if they use their personal vehicles for a work-related journey.

The same protection may also extend to rental vehicles for a one-time project or a business trip. With many people worried about the commercial auto insurance cost, you can pay just a few dollars more per month to gain these added bonuses.

Claim Back the Cost Through Business Deductions

Business vehicle insurance is an excellent investment for protecting your business should the worst happen. However, many people are unaware that it could even pay for itself by acting as a deductible expense, according to the U.S. Internal Revenue Service (IRS).

Generally, anyone using a vehicle primarily for work-related purposes is entitled to deduct insurance as an expense. The IRS usually allows you to deduct the total cost of ownership and operation of a vehicle, including your insurance costs.

Defend Yourself in a Lawsuit

Accidents can happen at any time, regardless of your own driving skills. Approximately six million auto accidents occur on the roads of the U.S. annually, and you could be involved in one of them.

If you or your employees are involved in an accident, your business could be liable for medical bills, repair costs, and legal fees. Unfortunately, personal auto insurance usually won’t cover the total cost of a serious incident.

As a general rule of thumb, commercial auto insurance policies come with double the liability limits of personal car insurance policies.

While you’ll still have to pay the stated deductible on your policy, holding a valid commercial auto insurance policy could be the difference between a four-figure bill and a six-figure bill.

Your Business Needs Higher Limits

Depending on your fleet’s vehicle type, you may need higher limits than an ordinary auto insurance policy can provide.

For example, a small car is unlikely to cause as much damage as a box truck. However, commercial auto insurance is designed to account for those potentially higher damages caused by larger vehicles.

Traditional car insurance will rarely have a high enough limit to cover all the associated costs.

The Law May Require It

States have their own laws regarding whether you need to have a valid commercial auto insurance policy. Depending on where your business is operating, you may need to possess commercial car insurance.

Even if your state doesn’t require it and allows you to operate using a personal auto insurance policy, you could be required to have commercial insurance if you cross state borders. Unfortunately, many people frequently get caught out by this fact, which can cost them, dear.

In many states, business vehicles that fail to take out commercial auto insurance are considered not to have insurance. Moreover, even if you don’t get pulled over, your insurer could refuse to pay if you’re involved in an accident.

With a complex patchwork of laws across the U.S., avoid the hassle of constantly checking up on changing regulations by taking out commercial vehicle insurance from day one.

Conclusion

Commercial auto insurance provides the comprehensive protection businesses require. But unfortunately, a surprising number of small and micro firms decide that a personal auto insurance policy is good enough for them.

Don’t learn the hard way when your insurer refuses to cover the total cost of an accident. Instead, explore your business vehicle insurance options today and ensure you have 100% protection.

Have you taken out commercial auto insurance for your business yet?

 



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