Do You Need Commercial Auto Insurance?By Floyd Arthur

Commercial auto insurance is insurance designed to cover one or more vehicles used for business purposes, such as a car, van or truck. Commercial auto insurance is generally required when you use a vehicle to transport people or goods for a fee, or when a vehicle is driven by one or more employees.

Commercial Auto Insurance

What Does Commercial Auto Insurance Cover?Although most of us think of commercial vehicles as pickup trucks and big rigs, commercial auto insurance can cover any type of vehicle that is owned or leased by a business, including cars, minivans and SUVs. In fact, you can purchase commercial auto insurance for almost any type of vehicle you use

in your firm’s operations, including:

Vehicles outfitted with work equipment Limousines and taxicabs Personal vehicles used for transporting passengers for Uber or Lyft Flatbeds

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Trucks, such as dump trucks, refrigerator trucks, catering trucks, box trucks and the like

Rented or leased vehicles

Generally, commercial auto insurance provides the same coverages as individual insurance with higher limits. Add-ons are available, however, that offer coverage for:

Equipment, such as that used in loading and unloading goods. Employees, including additional employees or people for whom you are

doing work. Your business, in the event you are sued

As with personal insurance, you can also purchase optional coverages, such as:

Personal injury protection, which covers medical costs and lost wages if you or your passengers are injured in an accident

Uninsured motorist coverage Personal effects coverage, which pays to replace or repair damaged items

that belong to you or an employee

How Much Does Commercial Auto Insurance Cost?

Commercial auto insurance rates vary considerably, depending on variables such as the number of employees you have, the size of your fleet and where in the United States you are. Ballpark estimates run anywhere from $1,200 to $2,400 for commercial car insurance, $5,000 to $10,000 for taxi or livery insurance and $2,500-plus for tractor-trailers nationwide.

Other factors that influence the cost of your commercial auto insurance include your drivers’ histories, the size and value of the vehicles you own and where and how far you and your employees drive.

Driver Histories

When your are hiring employees to drive a company vehicle, check their driving record with the DMV before bringing them on board. Drivers with a

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good driving record may lower both your insurance rates and your risks. Additionally, some insurers offer discounted rates to companies who hire drivers with a commercial driver’s license (CDL).

Fleet Size and Value

As with personal auto insurance, the cost of your commercial auto insurance will depend on the value of the vehicles you insure. If you own three older model pickup trucks, for example, the cost to insure them will be considerably less than for a fleet of 10 late-model limousines. If you don’t own the vehicles outright, the lienholder will require that you have collision coverage on the vehicles as well, increasing the cost.

How Much You Drive

As with personal auto insurance, commercial auto insurance rates are tied to the number of miles the vehicle(s) are driver each year. More mileage typically equals higher rates. Vehicles that transport hazardous materials or those that carry passengers typically cost more to insure as well.

Where You Drive & What You Transport

If your business is involved in transporting goods or passengers across state lines, or you transport certain types of hazardous materials to a foreign country, intrastate (within a state) or interstate (across state lines) additional insurance requirements will apply. These are mandated by the Federal Motor Carrier Safety Administration, and include:

$750,000 of liability insurance if the vehicle weighs more than 10,001 pounds and carries nonhazardous materials across state lines

$5 million of liability insurance if the vehicle weighs less than 10,000 pounds and carries radioactive materials, explosives, gases in excess of more than 3,500 water gallons, or any amount of materials that are poisonous by inhalation either intrastate or interstate.

$5 million of liability insurance for trucks weighing 10,001 or more that carry hazardous materials in excess of 3,500 gallons, or bulk explosives or materials poisonous by inhalation either interstate or intrastate.

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$1 million of liability insurance if the vehicle weighs more than 10,001 pounds and carries  hazardous materials other than those listed above, such as oil.

At Carmoon Group, we offer all types of affordable commercial liability insurance, including coverage for your business automobiles or trucks. Our agents are here every weekday from 9 a.m. to 6 p.m., so why not call our office at 516-292-3780 to schedule an appointment today? Too busy to call? Simply request a free consultation online and we’ll get back to you within one business day.

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