Commercial Auto Insurance
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Commercial auto insurance

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Commercial auto insurance

Commercial auto insurance covers legal bills, medical expenses, and property damage if a business vehicle is involved in an accident.

Does your small business need commercial auto insurance?

If your company owns a car, you will very likely need commercial auto insurance. Nearly every state requires commercial auto insurance coverage for business-owned vehicles.

New Hampshire and Virginia are the only states where auto insurance isn’t required. However, drivers are still responsible for any damages they cause.

Even when business auto insurance coverage isn’t required, it’s still a smart choice. Without it, you could end up paying thousands of dollars in medical bills and other costs.

What does commercial auto insurance cover?

Commercial auto insurance helps cover medical payments and property damage related to an accident. This coverage includes legal expenses if you’re sued. A policy may also cover vehicle theft, vandalism, and other losses and damages.

Most commercial auto policies include liability insurance to cover your business’s legal costs if one of your employees gets into an accident.

Read more about what commercial auto insurance covers.

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Businesses that purchase commercial auto insurance often:

  • Have a vehicle titled to their business
  • Drive to and from worksites
  • Carry tools, equipment, or products used for work
  • Transport clients or employees
  • Rely on delivery drivers or couriers
How to get commercial auto insurance

Does commercial auto insurance cover your employees’ personal car and your own?

Commercial auto insurance does not provide coverage for personal vehicles. If you or your employees sometimes drive personal cars for business purposes, consider buying hired and non-owned auto insurance.

Hired and non-owned auto (HNOA) insurance provides liability coverage for vehicles your business uses but does not own. That includes:

  • Employee-owned vehicles
  • Vehicles leased by a company
  • Vehicles rented by a company

What is the difference between commercial and personal auto insurance?

Commercial auto insurance policies are designed for company cars that cover a lot of ground. Policies typically have higher coverage limits to account for the increased risk.

Personal auto insurance policies only cover claims related to personal use, including your commute and travel unrelated to work. They have lower limits and usually cost less.

If you’re involved in an accident while driving your personal car for work, your insurance company might refuse your claim. That’s why independent contractors or sole proprietors who own a car used for work should consider commercial auto insurance or HNOA.

If you’re uncertain which policy you need, check with an insurance agent.

Read more about the difference between personal and commercial auto insurance.

How much does commercial auto insurance cost?

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Commercial auto insurance costs a median of $142 per month. 44% of Insureon small business customers pay less than $125 per month for their policies. Your cost is calculated based on a number of factors, including:

What coverage options should a commercial auto policy include?

At a minimum, your policy must meet state requirements. Your policy should also be able to cover all costs associated with an accident. Otherwise, you could end up paying legal fees and other expenses out of pocket.

Talk with an agent to discover policy options that match your driving situation. Options that cover different risks include:

  • Collision coverage, which covers physical damage to your own vehicle in an accident
  • Comprehensive coverage, which covers vehicle theft and damage from vandalism, fire, and other causes
  • Uninsured or underinsured motorist coverage, which covers damages incurred by another driver who is not adequately insured

You can control the cost of your commercial auto policy by adjusting your deductible. A policy with a higher deductible will cost less, but you’ll have to pay more before you can collect on a claim.

Updated: June 29, 2022
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