What is commercial auto insurance?

Many businesses own vehicles. It might be a single company car or an entire fleet. It could be a semi-truck and trailer, or it could be a food truck. 

Whatever the case, all business vehicles must be insured, just like personal vehicles, but through a commercial auto insurance policy rather than a personal policy.

It covers things like property damage, bodily injury, medical expenses, and legal costs incurred in automobile accidents.

Do I need commercial auto insurance?

If your business owns a vehicle, then you need commercial auto insurance. Only two states in the country don’t mandate auto insurance (New Hampshire and Virginia), but even those states put the burden of paying for any damages caused on vehicle owners.

That’s why you need a commercial auto insurance policy – to pay for property damage, bodily injuries, and other costs incurred during accidents. Without commercial auto insurance, your business would have to pay those costs out of pocket.

blue car covered by commercial auto insurance

And considering it’s all too easy to incur hundreds of thousands of dollars in damages, medical costs, and legal bills in a single accident, it's really important to make sure your company's vehicles are covered by a commercial auto insurance policy.

Not sure if you need commercial auto insurance? Answer the following questions:

  1. Do you have a vehicle registered to your business?
  2. Do you use a vehicle to drive to and from work sites?
  3. Do you use a vehicle to carry work-related tools or equipment?
  4. Do you carry work-related products in a vehicle?
  5. Do you regularly transport employees or clients in a vehicle?
  6. Do you work with drivers, delivery persons, or couriers?

If you answered yes to any of those questions, you need commercial auto insurance. At Kickstand Insurance, we can get you an affordable auto insurance policy that fits your needs and budget, and that can grow with your business. Complete our quick online form and get an instant no-obligation quote!

How much is commercial auto insurance?

Calculating workers' comp policy cost

Commercial auto insurance costs vary based on many different factors. The number and type of vehicles you own, their purpose/amount of use, your claims history, your employees’ driving records, and your policy limits and deductibles are just some of them.

On average, small businesses pay around $150 per month for commercial auto insurance. However, our insurance experts can help you reduce your costs without sacrificing coverage.

How does commercial auto insurance work?

Commercial auto insurance works much the same as a personal auto policy. Your policy will cover the listed vehicle(s) and the people who drive. 

If the driver causes an accident, your insurance policy will pay for repairs, medical costs, and legal costs for the other driver. It will also come into play if the other driver files a lawsuit against your business.

However, note that all insurance policies have limits. Your policy will pay up to that limit. Anything beyond that point is your business’s responsibility. This makes it very important to carefully determine the limits of your policy.

There’s a tendency to set lower limits to reduce monthly insurance payments. However, that often backfires, leaving businesses facing massive costs because their insurance paid up to the limit, but the damages were significant.

Not sure what your limit should be?

Defining those limits is a balancing act and requires considering things like how often the vehicle is driven, its uses/purposes, where it is driven, and more to create a risk profile. 

At Kickstand, our insurance experts understand how important it is that your business has access to affordable commercial auto insurance, but also how essential it is that your coverage is affordable. We work to create a customized insurance policy based on your unique needs and risks.

What does commercial auto insurance cover?

Ideally, you’ll work with an experienced insurer that can help you dial in your commercial auto insurance coverage. Each business has unique needs, and your policy should reflect those requirements. However, commercial auto insurance commonly covers the following:

Liability in Auto Accidents:

If you or an employee are involved in an at-fault accident, commercial auto insurance helps pay for the damages. Some of the most common costs include the repair costs to the other vehicle and legal expenses related to injuries to the other driver.

Medical Coverage:

Auto accidents often cause physical injuries to those involved. Your commercial auto insurance policy will help with medical payments for those injured in an at-fault accident, including the other driver and you or your employee. It will also cover passengers. Note that medical coverage is available even if you were not the at-fault party, which is an important protection against uninsured/underinsured motorists.

Theft and Physical Damage:

If your company car is stolen or vandalized and you don’t have commercial auto insurance, you’re on the hook for the replacement or repair costs. However, if you have a commercial policy, it will pay for vandalism, fire, weather, and impact-related repairs. It will also pay for a replacement if your company car is stolen.

Uninsured Motorist Accidents:

While most states in the US require all drivers to carry at least liability insurance, that doesn’t mean they do. Uninsured motorists represent a very real threat. In addition to the physical damage and potential injuries stemming from an accident, it leaves the business owner to pay for medical care and repairs. Commercial auto insurance helps you avoid that fate.

Rental Reimbursement:

If a company vehicle is damaged and out of service for repairs, you should still be able to serve your customers or clients. A rental can fill that role, but it comes at a cost. With the right commercial auto insurance policy, you can be reimbursed for the cost of a rental car.

Ready to take the next step?

Find commercial auto insurance that fits your business’s unique needs. It takes just 5 minutes to complete our simple online form and you’ll receive an instant, no-obligation quote.

What isn’t covered by commercial auto insurance?

While commercial auto policies cover many different situations and perils, there are some that they do not cover. These are called “exclusions”. Some of the most common exclusions are:

Customer Vehicles:

Your commercial auto insurance policy only covers business vehicles. It does not cover customer vehicles. This means that any vehicles parked at or stored in your business premises are not covered.

Uncovered Vehicles:

It’s always a wise idea to have new business vehicles added to your insurance policy immediately. If you purchase a vehicle and do not add it, it is not covered by the policy, and you’ll be responsible for any accidents. Note that some policies can be configured to offer an “extension” for new vehicles, but this is not usually part of a standard commercial auto policy.

Personal Vehicles:

If your business uses but does not own a vehicle – such as an employee using their personal vehicle for work-related purposes – your commercial auto policy does not cover those vehicles. Instead, you would need what’s called a hired and non-owned auto insurance policy.

Who is insured under a commercial auto insurance policy?

Business owners need to make informed decisions when purchasing commercial auto insurance. Adding the wrong people to the policy could drive up your costs considerably. 

Your policy can cover you (the business owner), as well as employees, family members, and other drivers. In emergency situations, anyone can drive a vehicle and benefit from coverage. However, if they drive in non-emergency situations, you should add them to your policy as listed drivers.

Understand that each person you add to the policy can increase the costs. Their personal driving record will affect your premiums. Exercise caution in case employees have speeding tickets, accidents, or DUIs that might drive up your costs.

What types of vehicles are covered by commercial auto insurance?

Almost any vehicle can be covered by commercial auto insurance. This includes the following:

Not sure if your vehicle qualifies for commercial insurance?

We can help. One of our insurance experts will discuss your needs, vehicle type(s), and budget to create a policy uniquely suited to your business.

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Do I need both commercial and personal auto insurance?

If your business owns a vehicle, it cannot be covered by personal auto insurance. So, where does that leave business owners who have a single vehicle for both personal and business use? 

Thankfully, you do not necessarily need to purchase two types of insurance. This is because commercial auto insurance usually covers an employee driving a company vehicle even if it is for personal use. 

However, if we’re talking about personal vehicles occasionally used for work-related purposes, you’ll need to buy what’s called hired and non-owned auto insurance.

When do you need commercial auto insurance?

You need commercial auto insurance if you use a vehicle for business-related purposes. However, if you do not use a vehicle for business purposes, or you only occasionally use a personal vehicle for work-related needs, you do not need a commercial auto insurance policy. 

In the first instance, your personal auto insurance will cover your vehicle (if you’re not using it for anything related to the business). In the second case, a hired and non-owned auto policy will give protection for occasional use. 

However, we strongly recommend that business owners take a long, hard look at their vehicle use and honestly estimate how much they use a vehicle. Often, a commercial policy is the better choice. 

Of course, if your business regularly uses a vehicle or you own a fleet, they all must be covered by commercial auto insurance.

 Are trailers covered under commercial auto insurance?

If you use a trailer for business purposes, you’ll want to ensure it’s covered by your commercial auto insurance. 

Unfortunately, most policies don’t automatically include trailer coverage. You must add it to the policy manually. If you don’t, then the vehicle will be covered but not the trailer. 

If you use a trailer for business purposes, whether regularly or occasionally, it must be covered. We can help you find the right coverage configurations and limits to suit your needs now and in the future.

Do I need commercial auto insurance for Uber?

Yes, you do need commercial auto insurance if you intend to drive for Uber.

Ridesharing companies like Uber have disrupted the travel industry, bringing competition for taxi companies, limousine companies, and others. In addition to introducing new competition for these companies, they’ve opened up new career opportunities for people across the country. 

If you’re thinking about driving for Uber (or any other ridesharing company), you probably have a lot of questions. How do you track your mileage? How do you get paid? What about insurance?

That last one is one of the most important. You will need to purchase commercial auto insurance before you can start driving. Make sure to discuss your needs with the agent, too. You’ll want a policy that reflects the risks you face as a rideshare driver, which has important ramifications for things like policy limits and out-of-pocket costs.

At Kickstand Insurance, we’ve worked with rideshare drivers across the US to help them find affordable commercial auto insurance that doesn’t sacrifice protection. We can do the same for you.

Want to find out how much commercial auto insurance will cost for your business?

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