All business owners who use vehicles for business operations need auto insurance to protect them against financial losses or liabilities. An auto accident can lead to severe economic losses if the business owner doesn't have insurance or adequate coverage. Auto insurance policies provide owners with varying coverage levels that pay for auto repair and medical costs and offset financial losses related to inventory or cargo losses. Continue reading to find out how commercial auto insurance plans work.
Choose the Correct Level of Coverage
Auto insurance is available at different coverage levels. The state mandate requires at least auto liability coverage to provide funds to pay for medical expenses, auto repair costs, and replace the victim's lost wages after severe injuries. However, business owners can choose any coverage level that meets their current demands. Review commercial auto insurance plans to find the policy that meets your company's existing insurance requirements.
Coverage for Accidents During Business Owners
Commercial auto insurance policies apply coverage to all accidents during the company's hours of operation. As long as the driver is en route to a customer or performing regular services, they are covered if an auto accident happens. Some auto insurance companies require the business owner to define when their business hours restrict coverage, and the business owner must review any restrictions or limitations in the policy before accepting it.
Get Coverage for Cargo and Products You Deliver
Additional coverage is available through auto insurance policies for the company's cargo and products the drivers deliver to customers. If an accident happens, the business owner can start a claim to recoup their losses from the accident. The terms of the policies determine what is considered cargo or is included in the company's inventory. Insurers may catalogue items for the business and keep a price list for these products to appraise any items damaged, stolen, or lost due to an auto accident.
Replacing Your Commercial Vehicle
Comprehensive and collision coverage are parts of full coverage; if the business owner has an existing auto loan, they must have those coverages to protect their vehicle. If the automobile is a total loss, the policy offers the car's entire value so the owner can replace it. The high coverage level protects the owner against severe losses, and a total loss means they can no longer use the vehicle, and the car cannot be repaired.
Should You Get Standard Auto Coverage?
If the owner or a driver uses the commercial vehicle for non-business reasons, the owner must buy a standard auto insurance policy. The coverage level defines what the policy covers and what circumstances are included. Standard auto liability is the minimum coverage level, and comprehensive and collision together are the highest coverage level. The owner could get discounts on the policy if they do not use the automobile frequently for non-business purposes.
Auto insurance policies range from auto liability to comprehensive and collision coverage. Auto liability coverage applies to the victim's losses if the commercial driver causes the accident. Comprehensive and collision coverage applies to both parties' losses and replaces the business owner's vehicle if it is a total loss. The business owner needs the maximum coverage level if they have an auto loan. Talk to an auto insurance agent to compare insurance policies and find the best policy for your commercial vehicles.