Last week, we talked about winter driving safety tips for that insane snow storm that powdered northern states. Here in Southern Oregon, the snow has mostly melted, but we’re still navigating frozen, icy mornings and frigid nights. That means those safety tips are still useful, especially if your business requires driving a company car. But, even if you follow all the tips, accidents can still happen, and cost your business a ton of money. That’s where auto insurance for commercial vehicles comes to the rescue.
Auto insurance for commercial vehicles is a necessity for businesses that use vehicles as part of their operations. It provides coverage for vehicles used for business purposes, protecting businesses from financial losses due to accidents or damages.
Having auto insurance for commercial vehicles is important for several reasons, like safeguarding against liability claims and ensuring that vehicles are repaired or replaced after an incident. This protection offers peace of mind for business owners, allowing them to focus on their operations without worrying about potential financial setbacks.
Types of Auto Insurance for Commercial Vehicles Coverage Available
Just like with personal auto insurance, there are several types of commercial auto insurance to choose from. At the very least, you should have liability insurance for your company-owned vehicles. Depending on how much you use them and how much risk you’re at when using them, you may want to consider additional coverage. Some of the main types of commercial auto insurance are:
- – Liability insurance: Covers the costs associated with injuries and property damage you are responsible for if you cause an accident.
- – Collision: Covers the costs to repair or replace your damaged or destroyed vehicle after an accident.
- – Comprehensive: Formally known as “other than collision,” this portion of your policy covers damage to your vehicle from causes such as auto theft and weather damage.
- – Medical payments: Covers the costs of injuries for you and others in your vehicle after an accident, regardless of who was at fault.
- – Uninsured Motorist Protection: Keeps you covered when you’re in an accident with an underinsured, uninsured, or unknown (hit and run) driver. If the at-fault driver’s insurance can’t cover you, this coverage will.
- – Towing and roadside service: Facilitates emergency roadside assistance and towing to help you get your vehicle back on the road or to a shop for repair.
Factors Influencing the Cost of Auto Insurance for Commercial Vehicles
There are a lot of things that go into determining how much auto insurance for commercial vehicles costs. It’s important to understand what factors affect your business so you can prepare and try to find the best rates. It’s probably obvious that the driving records of anyone operating commercial vehicles will impact insurance rates, but there are so many other things to be aware of.
The type of vehicle used is a significant factor. Larger and more specialized vehicles may incur higher premiums due to the increased risk and cost of repairs. On average, the direct cost for an auto body repair on commercial vehicles is nearly $12,500. Meanwhile, auto body repairs for commuter cars usually only cost up to $7,500. That’s 40% more in repair costs that would need to be covered.
The nature of the business and its industry can also affect rates, as certain sectors may have higher accident rates or liability exposures. For example, contractors have a higher need for insurance due to the risk of using vehicles on job sites and around heavy equipment. Despite the increased risks of the industry, nearly a third of construction laborers are required to operate a commercial vehicle at work, meaning the chance of an accident occurring is faced frequently.
Business size is another crucial factor. Companies with a larger fleet typically face different risk assessments compared to those with a single vehicle. There are also just more vehicles to be insured, which can really increase the cost of coverage when multiplied across a large fleet.
Areas with higher traffic, theft rates, or accident occurrences can lead to increased premiums. This means the location of your business is going to have a major impact on your insurance rates. Generally, rural areas are going to have lower insurance costs than the city, unless it’s an area prone to severe weather events like wildfires. Regular fires, floods, hurricanes, hail, and tornadoes can all increase the risk to your business vehicles.
Benefits of Auto Insurance for Commercial Vehicles
Investing in auto insurance for commercial vehicles offers numerous advantages that can significantly enhance the stability and security of a company’s operations. One of the primary benefits is the protection against liability risks. In the event of an accident where the company vehicle is involved, commercial auto insurance can cover the costs of damages or injuries sustained by others. This coverage helps to mitigate the financial impact on the business, ensuring that legal fees, medical expenses, and potential settlements do not overwhelm the company’s financial resources.
Another crucial benefit of commercial auto insurance is coverage for vehicle repairs and replacement. Accidents, vandalism, or natural disasters can lead to significant damages requiring repairs or even total replacement of vehicles. With the right insurance policy, businesses can recover costs associated with these unforeseen incidents, allowing them to maintain their operations without lengthy interruptions. This protection is particularly valuable for companies that rely heavily on their vehicles to deliver goods or services.
Most importantly, having commercial auto insurance provides peace of mind for business owners. Knowing that they are protected against potential financial losses allows entrepreneurs to concentrate on growing their business, rather than worrying about the risks associated with using vehicles for commercial purposes. This sense of security fosters a more proactive approach to operations because the reduced stress means work will require an average of 23% less effort.
Next Steps for Your Business
Auto insurance for commercial vehicles is a necessity for any business dependent on work vehicles. It covers your business if anything happens with your vehicles and can protect the business from liability claims or costly repairs. If you need guidance in finding the right insurance, or would like to learn how to lower the cost of your coverage, an insurance agent who specializes in commercial auto insurance can help get your business covered.
If you’re ready to update your policy, you can reach out to our team at Ashland Insurance online or give us a call!
541.482.0831 Ashland
541.857.0679 Medford