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November 13, 2020

Four Essential Insurance Benefits for Commercial Cars

If you buy a vehicle that you will use for business, then you must carry commercial auto insurance on it. This is specialized coverage that is designed to cover a business’s investments and liabilities in owning and operating vehicles. You therefore have a lot of opportunities to tailor these benefits to your advantage. That’s why, when putting together your plan, it helps to know the benefits available to you.a car parked in a parking lot  

Though there are numerous benefits available in most commercial auto policies, some of them are much more important to understand. Consider the three following options as the benefits that you should always carry within your policy. 

Required Liability Insurance 

Nearly all states require that registered drivers, commercial drivers included, carry minimum amounts of liability insurance. In California, these limits are: 

  • $15,000 Bodily Injury Liability/Death Coverage per person 

  • $30,000 Bodily Injury Liability/Death Coverage per accident 

  • $5,000 Property Damage Liability Coverage 

Liability coverage pays when the insured driver is at fault for accidents that harm others. If your company driver causes a wreck, then this coverage helps the business repay the other driver. 

Additionally, these minimum required limits are only the minimum coverage that you can buy. You can increase your liability coverage in multiple ways to your benefit. 

Keep in mind, even if an employee drives their own car for business, the business still assumes liability for their actions. Therefore, the company will likely need to purchase hired/non-owned auto liability insurance to address these risks. 

Physical Damage Insurance 

Liability insurance does not cover damage to the insured commercial vehicle itself. To get this coverage, you will need to buy expanded physical damage insurance. There are two components to this coverage: 

  • Collision insurance pays for damage following wrecks. 

  • Comprehensive insurance pays for damage to the vehicle following non-collision hazards like vandalism, theft, severe weather or fires. 

All physical damage policies will include limits on deductibles on what they will pay for claims. Therefore, work with your agent to determine which plan is best for you. 

Uninsured/Underinsured Motorist Insurance 

An uninsured/underinsured motorist policy covers losses of the insured commercial driver that another party’s auto insurance cannot. For example, if you become the victim of a hit-and-run accident, or if the driver who is at fault for the wreck is uninsured, then you can’t file a claim against their liability insurance. Uninsured motorist insurance is the benefit that will help you do so.  

Underinsured motorist coverage is like uninsured motorist coverage. However, it pays when an at-fault driver does not have enough insurance to compensate you. Therefore, it is often very beneficial to commercial drivers who have high liabilities to insure anyway. 

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