What Is Commercial Auto Insurance And Why You Need It?

Commercial Auto Insurance
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Commercial Auto Insurance is very important for any business that owns vehicles for commercial purposes and with the same, you can get several benefits that you would have never imagined. If in case you are a small business owner, then your car insurance might not cover you when you’re driving for work, as well as it will certainly cover a food truck or any additional special vehicle.

That’s where commercial vehicle insurance comes as a rescue to covers accidents, damage as well as theft to company vehicles. In case you want to know about all such benefits of Commercial Auto Insurance, then read the following article until the end.

About Commercial Auto Insurance

Before starting anything further, we must know what commercial auto insurance is all about. It is a policy of physical damage along with the liability coverage for the amounts, circumstances, as well as usage that is not covered by a personal auto policy.

For any business person, it is quite important to recognize the difference between a personal auto insurance policy and a commercial auto policy for their business. This type of business insurance consists of a variety of vehicles like from automobiles that are used for business, including company cars, to a wide-ranging of commercial trucks.

It is required to cover the cars, trucks, and vans used in escorting your business. Large fleets, together with small businesses, should be suitably covered by a commercial auto insurance policy.

In addition to that, commercial vehicle insurance covers a business’s vehicles, no matter what vehicle it is like if that’s a specialty vehicle such as a catering truck or a regular car used for business. It steps in where regular auto insurance steps back: Most car insurance consists of specifically eliminate business use from their coverage.

Coverages in A Commercial Vehicle Policy

Commercial vehicle policy includes these coverages which are as follows:

  • Bodily injury liability coverage
  • Property damage liability coverage
  • Combined single limit (CSL)
  • Medical payments, no-fault or personal injury coverage
  • Uninsured driver coverage
  • All-inclusive physical damage coverage
  • Collision coverage

Commercial Vehicle Insurance Cost

Generally, the cost of commercial vehicle insurance is determined by the type of vehicle, who’s driving it, as well as whether you’ll be carrying any passengers or not. More precisely, all the factors which affect commercial vehicle insurance can all drive up the cost.

Additionally, the cost of commercial vehicle insurance differs extensively. Expect it to cost at least $1,000 each vehicle per annum, with specialty vehicles estimating at least tens of thousands per year to protect.

Legal Requirement of Commercial Vehicle Insurance

Many of the times, this common question arises that: Is Commercial Vehicle Insurance Legally Required? The answer to this question is “Yes”. Commercial vehicle insurance is obligatory for all the vehicles that a business owns for commercial purposes. It is considered one of the most important parts of business insurance and you should never drive for a business deprived of it.

How to Get Commercial Vehicle Insurance?

Commercial Auto Insurance is sold in two methods and that is through captive and independent insurance agents. Captive agents are bound to one company only. While Independent agents, on the other hand, can also shop between as many companies as they want, therefore, they can find you the real best deal for you and these are not just the best deal one company offers.

Commercial Auto Insurance:

Prerequisites Required Before Applying

Here are some of the prerequisites that you will require before applying for commercial auto policy:

  • Firstly, and most importantly, your vehicles must have been registered in the name of your business.
  • A federal tax identification number
  • Some companies may also accept your social security number if in case you are a sole proprietor.
  • After getting all these things you can search out the best rates for commercial auto insurance.
  • You will be asked some questions such as Business Address and Phone Number, Tax ID Number, other questions like the type of business you have, Are there any of the vehicles used for personal driving; Where are the vehicles garaged? and so on.

Here Is a List of Everything That Commercial Vehicle Insurance Cover:

Based on your vehicle and your business’s size and niche, you can mix and match the commercial vehicle insurance.

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Here is the list of everything that commercial vehicle insurance can include:


The topmost factors due to which commercial vehicle insurance is retained by the small businesses that it covers costs that are related to a collision, such as repairs to the vehicle.

Covers Loss

If your vehicle is stolen which is in use for the commercial purpose of your business, then it also covers the loss of your stolen vehicle.

General Accountability

Commercial Vehicle Insurance also covers the damages to the property or injury to others that are mainly involved in a collision with the business’s vehicle.


This insurance covers all the damages and even to those which are not related to a collision like fires, vandalism, or falling objects like trees, rocks, etc.

Owned & Non- Owned and Hired Vehicles

This insurance not only covers all aspects of vehicles that are owned under a business’s name but also covers those vehicles that are not owned by the business but are also driven by its employees, such as a salesperson’s car. Other than that it also covers any vehicles that are rented by any business.

Commercial Auto Insurance: Why it is Important?

Before discussing Commercial Auto Insurance benefits, we must know that who requires his insurance. If you’re a small business owner who regularly uses their vehicle for a business like a florist bringing flowers, you perhaps need commercial vehicle insurance. And if in case your business has devoted company vehicles, then you certainly need it.

If you employ delivery drivers or else the couriers who use their vehicles, then you are also going to need to buy commercial vehicle insurance for them, named non-owned vehicle coverage. If driving is part of your business, then you will require some kind of commercial vehicle insurance.

Without insurance, driving is illegal and if your coverage eliminates commercial driving, then you are going to be uninsured when you’re driving for business then it means that you might face major fines or additional penalties.

Benefits of Commercial Auto Insurance

The first benefit that you get from Commercial Auto Insurance is that the premiums on your commercial vehicle policy can also be tax-deductible; in addition to that, you can find many additional tax benefits if you have a small business.

This insurance will help you to use a business address in an area with no money down car insurance. You can also have some drivers on the policy who do not live in your household.

The best part is that you don’t have to go through much procedure where your credits are checked and the reason behind this is that some companies sell commercial vehicle policies without even checking the credit of the individuals or else of the business credit for mainly determining the premiums.

Also, this insurance will help you to have many vehicles on the policy deprived of a match with the drivers. For example, with a commercial policy, you are permitted to have 6 vehicles on the policy along with only two drivers.

Bottom Lines

If you’re a small business owner and are involved in commercial vehicles then Commercial Auto Insurance is a must. With the help of this insurance, one can easily use a business address in an area with no money down car insurance.

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