Commercial Auto Insurance

Commercial Auto Insurance Explained


What is it?

Commercial car insurance is a type of coverage that protects a business and its various vehicles, whether they are cars, vans, buses, trucks, limousines or other kinds of commercial vehicles. Businesses with large fleets can buy this type of insurance to enormously save on repairs and other costs. Good commercial car insurance can even be utilized to pay for big settlements involving medical costs and other types of losses.

Who Benefits

This is insurance coverage designed for businesses, governmental agencies and non-profits that utilize commercial vehicles. According to Department of Motor Vehicles regulations, there is a myriad of kinds of commercial vehicles. Such vehicles are normally defined by their gross vehicle weight rating. If a vehicle weighs more than a certain amount, it likely will need to be insured by a commercial vehicle insurance plan.

How it Functions

Various factors are at work in the determination of a monthly premium for commercial vehicles. For instance, trucks that are utilized in the transport of freight over long distances are generally covered by the most costly policies available. Conversely, a small transit van providing local shuttle service will usually be far less expensive to insure. There are other factors in determining premiums of course, such as how old the vehicle is; this is due to the obvious fact that older vehicles will likely have more mechanical breakdowns, which can also mean more accidents and other dangerous consequences of plying the roads.

The Kinds of Coverage Available

The law mandates some level of liability insurance for any commercial vehicle. This kind of coverage will pay out to help cover medical costs of injured drivers and passengers. Liability insurance also compensates for property damage for which the commercial vehicle is at fault. Comprehensive coverage protects commercial cars from damages that are not the result of collisions with other vehicles. As the title suggests, collision insurance can be utilized to pay for both exterior and interior damage of a commercial automobile involved in an accident with another vehicle.

Big Benefits

Obtaining this kind of insurance can lead to significant savings for a business that uses commercial vehicles in their operations. After some loss-causing event, policyholders can file claims and be the recipient of significant amounts of money to pay for repairs and or vehicle replacement.