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How Does Commercial Auto Insurance Work?

african american female truck driver on her truck with commercial insurance

If you own a business that relies on one or multiple commercial cars, you may already have commercial auto insurance or are at least considering it. Although you may know the basics of personal auto insurance, you’re probably wondering what the difference is between commercial auto insurance vs. personal auto insurance. Both can cover costs for auto accidents and related injuries, however, the main difference is commercial vehicle insurance protects your business by protecting the vehicles, drivers, and property within. Learn the ins and outs of commercial auto insurance including who needs it and what it covers.

How Does Commercial Auto Insurance Work?

Are you thinking how does commercial auto insurance work? Essentially, it works by covering incidents related to your company’s vehicles. Having commercial car insurance can cover you for costs that come from:

  • Commercial vehicle accidents
  • Damage to business inventory within vehicle
  • Injury to the employed driver or his/her passengers

Commercial vehicles come in all types. The great thing is, you can tailor your policy to match the vehicle type and relative needs. So, if you’ve been looking for something specific like commercial van insurance or commercial truck insurance, know you can get coverage for a wide range of vehicle types.

Who Needs Commercial Auto Insurance?

Confused as to who needs commercial auto insurance? Think about the type of work you or your employees do. If you own a company and use one or more vehicle(s) for various tasks, like truck driving, you need coverage. Say you only operate one vehicle for things like local food deliveries; the same applies. In today’s gig economy, this means many drivers need coverage for services like Instacart and Postmates. Yet, this could also include rideshare drivers that use Uber or Lyft (although separate rideshare insurance is also an option). It doesn’t matter if you’re using only one vehicle or multiple vehicles. If they’re being used for commercial purposes, you’ll need insurance.

Personal Auto Insurance vs. Commercial Auto Insurance

You may ask yourself, can I use my personal auto insurance in place of commercial auto insurance? Basically, the answer is no. If you have an accident with a commercial vehicle, your insurance company won’t treat it like a personal auto accident. You won’t be covered for damage done to your inventory or for people involved (driver or passenger) that aren’t under your policy. Additionally, there’s a higher risk involved with commercial drivers than for drivers that are regularly maneuvering through traffic. Auto insurance companies know this, so if you try to get personal auto insurance for a commercial vehicle, you’ll probably get denied.

Business vehicle insurance is specialized to help businesses. Consider the differences as benefits that you won’t get with regular auto insurance. Some of these benefits include:

  • Commercial auto insurance as a tax-deductible business expense
  • Business compliance with the law requiring insurance
  • Coverage for driver and passenger injury
  • Protection for business property/merchandise

So, if you know you’re dealing with one or more commercial vehicles, you need the right insurance. Review commercial auto insurance companies, then get coverage for your vehicle(s).

How Much Does Commercial Auto Insurance Cost?

Understandably, cost varies by a number of factors including business size, number of vehicles, and amount of coverage needed. For example, if you’re looking for business car insurance for a one-person operation, you can expect to pay less than someone operating a truck-driving company with 50 big rigs. Your employees’ driving record also plays a part in how much you’ll end up paying. If your driver has a less-than-perfect driving record, it will affect your rate. Oftentimes, business owners will seek drivers with perfect or near-perfect driving records to ensure low insurance costs. Consider these factors, and you’ll have a better idea of how much your coverage will cost you.

Bottom line, you need insurance for your commercial vehicle(s), and your commercial drivers. Yes, it’s required by law, but you’ll also give yourself relief from having to pay out-of-pocket for costly business-related accidents.

Now that we’ve answered your question “how does commercial auto insurance work?”, it’s time to protect yourself and your business with commercial auto insurance from Freeway Insurance. Request your free commercial vehicle insurance quote online or over the phone at (800) 777-5620.

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