Commercial vehicle insurance is an essential coverage for most types of businesses that rely on cars, trucks, and other vehicles for work purposes. But it can also be a complex and confusing coverage. That's why it's important to know the details about this insurance before you ever get a policy.
No matter your industry, these common commercial vehicle insurance questions can provide helpful guidance. An independent insurance agent can answer any further questions and help you find coverage for your business. But for starters, here's a big list of all the questions you might have about commercial vehicle insurance.
What is Commercial Auto Insurance?
Commercial vehicle insurance provides protection against both property damage and liability for any vehicle designated for business use.
Whether you drive a vehicle that's for dedicated business use or drive a personal vehicle for business, it's important to have commercial auto insurance because your vehicle won't be covered under a personal auto insurance policy.
What does Commercial Vehicle Insurance Cover?
Several types of coverage may be included in your commercial vehicle policy. Typical commercial vehicle coverage includes:
- Property damage liability and bodily injury liability to third parties
- Personal injury to you, your employed drivers or passengers, including medical expenses and lost wages
- Collision coverage for accidents, regardless of who's at fault
- Comprehensive coverage for damage other than collision
- Medical payments coverage for the cost of hospitalization, treatment, and funeral expenses
- Uninsured and underinsured motorist coverage
Additional coverages can include:
- Non-owned auto coverage for when you or your employees drive a rented or borrowed vehicle
- Loading and unloading liability
- Substitution transportation when your commercial vehicle is being repaired and you use a rental from the repair shop
How does Commercial Vehicle Insurance work?
Commercial vehicle insurance provides coverage for any vehicle you use for business purposes and for your commercial drivers. As a business owner, you can get commercial vehicle coverage for a single vehicle or a fleet of vehicles.
Coverage protects your commercial vehicles from weather damage, accidents, and many other types of incidents. If you or one of your drivers is at fault in an accident that injures another person or damages their property, the liability coverage in your commercial vehicle policy will cover the costs of the claim, up to the limit of your policy.
Many business owners choose to buy a commercial umbrella policy to cover the costs of large liability claims that exceed the limits of the commercial vehicle liability policy. Commercial umbrella insurance often comes in $1 million dollar increments which can greatly help cover the costs of liability claims and lawsuits, protecting the business financially.
Why do I need Commercial Vehicle Insurance?
You need commercial vehicle insurance for any automobile, taxi, van, limo, bus, or small truck that you use for business purposes, because a personal auto policy won't cover this type of use. Coverage protects you and your business from the costs of property damage, injury, and liability claims you may incur while using your commercial vehicles.
For larger commercial vehicles such as tow trucks, cement trucks, construction vehicles, tractor trailers, or semi-trucks, you will need a commercial truck insurance policy. Not only is your commercial vehicle policy critical for protecting your business financially, but it's also required by law.
How Much does Commercial Vehicle Insurance Cost?
The cost of auto insurance depends on a number of things, including the company you choose, the size of your business, the types of vehicles used, the number of vehicles you need to insure, your business's risks, and the amount of coverage you need.
Generally, a passenger auto vehicle will cost much less to insure than a heavy duty vehicle such as a dump truck. However, insurance carriers also offer fleet insurance at a bulk discount. The driving records of the drivers who will be using your commercial vehicles and their ages also factor into your policy's cost.
Commercial vehicle insurance rates are generally least expensive for vehicles used in construction and farming. Vehicles used as passenger vehicles and for small deliveries are slightly more expensive. Heavy duty cargo vehicles that transport loads of more than 10,000 pounds are often the most expensive to insure.
Is Commercial Vehicle Insurance Tax-Deductible?
Yes, your commercial auto coverage is often tax-deductible. There are many situations that allow you to deduct the cost of commercial auto insurance for tax purposes when you use your vehicle for commercial or business use.
If you're self-employed, you may be able to deduct your commercial auto insurance premium under Schedule C. If you're an employee and don't receive mileage or expense reimbursement, you can use Form 2106 (Employee Business Expenses). Contact the IRS or a tax adviser for clarification.
How Do Independent Insurance Agents Help Me Find Commercial Auto Insurance?
It’s simple. Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. Not only that, but they’ll also cut the jargon and clarify the fine print, so you know exactly what you’re getting.
Independent insurance agents also have access to multiple insurance companies, ultimately finding you the best commercial auto coverage, accessibility, and competitive pricing while working for you.