Commercial Auto Insurance – Understanding the Different Types and Coverages Available
When looking for commercial auto insurance, it’s important to understand the different types and coverage options available. Next makes the process easy, with an online form where customers can enter basic business information and receive a quote within minutes. The company also uses sophisticated technologies to tailor policies to the unique needs of every customer, helping to keep premiums low. As a result, Next policies typically cost up to 25% less than comparable policies from rival companies.
Coverage options
Choosing a commercial auto insurance policy is an important step in ensuring you are adequately protected. A commercial vehicle is subject to different risks than a private car. For example, if you own a truck and use it for business purposes, you will not be covered by a personal auto policy. However, personal auto insurance carriers may tailor their policies to reflect this.
A commercial auto insurance policy can include liability coverage, which will cover bodily injury and property damage claims. Other options include medical payments, which pay for reasonable medical costs, or funeral expenses for the people injured in an accident. Collision and comprehensive coverage also pay for damage to your vehicle that was not caused by a collision.
A commercial auto insurance policy will cover your business vehicles, as well as property owned by others. You can choose to extend your coverage to cover employee vehicles or rental cars. You may also choose to extend your coverage to include the automobiles and property of other people.
Exclusions
Although commercial auto insurance is fairly broad coverage, it doesn’t cover every possible auto-related claim. There are 13 separate exclusions that can limit or eliminate coverage. Some exclusions are absolute, while others have exceptions. The first exclusion applies to bodily injury or property damage expected from the insured’s perspective. The interpretation of this exclusion varies by state.
Another common exclusion is the named driver exclusion. This clause prevents the coverage of any unauthorized drivers. This exclusion is usually found in nonstandard insurance policies or those that include drivers who are known to be high risk. In some instances, excluding a driver can reduce premiums.
Some commercial auto insurance policies exclude certain types of coverage, such as uninsured/underinsured motorist insurance (UM/UIM). This protection protects your business against drivers who have no insurance or are underinsured. Also excluded are personal injury protection policies, which cover the medical costs of accident victims regardless of who is at fault. These policies are especially important in states such as Florida, where no-fault insurance applies.
Rates
Commercial auto insurance rates continue to rise. According to MarketScout, commercial auto rates increased by 9.7% in the third quarter of 2021. Umbrella coverage increased by 11.7%, and the composite rate of commercial insurance pricing increased by 6.8%. Commercial auto rates can have a big impact on a company’s bottom line. As a result, companies should keep fleet costs down.
There are many factors that influence the cost of commercial auto insurance. First, the type of coverage you need is important. Generally, higher coverage means a higher premium. For instance, if your business owns a fleet of trucks, you will pay higher rates than a small company with one vehicle.
Another factor in commercial auto insurance rate hikes is claims severity. Insurers are struggling to maintain profitability in the commercial auto insurance market, and this burden is being passed along to policyholders. Even companies with clean loss records can experience year-over-year rate increases.
Cost
When it comes to the cost of commercial auto insurance, a number of factors may affect the premium. They include the amount of mileage driven by a fleet, the location where vehicles are parked, and the risk of accidents and vandalism. Furthermore, if a business is responsible for transporting hazardous cargo, it may need to pay a higher premium. Fortunately, there are some ways to reduce the premium.
The cost of commercial auto insurance is generally higher than that of personal auto insurance. The average cost of commercial auto insurance for a single vehicle is $1,982 annually. But the costs of insurance for multiple vehicles can add up to more than twice that amount. Many business owners are looking for ways to reduce the costs of insurance.
One of the best ways to lower the cost of commercial auto insurance is to keep your driving record clean. Most insurers check your driving history for the past three years. Therefore, if you have a blemish, it could cost your business more money.
