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Commercial auto insurance in Tennessee
Commercial auto insurance covers legal fees and other expenses if a business-owned vehicle is involved in an accident. It's required for all commercial vehicles in Tennessee.
Who needs a commercial auto insurance policy in Tennessee?
Any Tennessee company that uses vehicles for business purposes must insure them appropriately. Commercial auto insurance covers vehicles owned by your business, while hired and non-owned auto insurance (HNOA) covers personal, rented, and leased vehicles used by your business.
Your personal auto insurance policy covers you while driving to and from work, but not while making deliveries, picking up supplies, and other work-specific uses. A business auto policy would cover you and your personal vehicle in case you’re at fault for an accident during a work-related errand.
Any vehicles you own solely for work purposes must be covered by a commercial auto policy, whether you own a landscaping pickup, a food truck, or a fleet of company cars.
Why is commercial auto insurance important?
Your business could be in legal and financial jeopardy without commercial auto insurance coverage. In Tennessee, all vehicles are required to carry auto liability insurance.
If one of your business vehicles is at fault in an accident, you could face an expensive lawsuit or settlement. You’d likely have to pay for damage to the other vehicle or property, medical costs, lost wages, pain and suffering, plus other related costs.
Additionally, you could face severe penalties for not carrying auto insurance. Driving without insurance in Tennessee could result in a fine of $300, as well as a suspension of license plates and/or vehicle registration.
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How does commercial vehicle insurance work in Tennessee?
From Knoxville to Nashville, all vehicles in the state of Tennessee are required to have a minimum amount of auto liability insurance coverage, whether they’re for personal or business use.
Tennessee's insurance requirements are:
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $15,000 property damage liability per accident
Your insurance agency might recommend higher policy limits based on the types of vehicles you own and how they’re used.
Semi-trucks, tractor-trailers, and other vehicles with a Tennessee Department of Transportation serial number will have additional liability coverage requirements, depending on the type of vehicle and how it’s used.
You can see if your business needs these additional requirements by checking your USDOT number or docket number with the Federal Motor Carrier Safety Administration.
How much does commercial car insurance cost?
Your premium is based on a few factors, including:
- Number of vehicles
- Vehicle type and value
- Level of risk involved
- Claims history
- Employee driving records
- Policy deductible and limits
Commercial auto insurance costs an average of $147 per month. 37% of Insureon small business customers pay less than $100 per month for their policies.
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What if I use my personal vehicle for work?
If you’re using your own vehicle for work-specific activities, your personal auto policy wouldn’t cover you in the case of an accident. That’s why many small business owners purchase hired and non-owned auto insurance (HNOA). This liability policy covers accidents in personal, leased, and rented vehicles used for work purposes.
If you or an employee gets into an accident while driving a personal car for a work errand, your HNOA coverage would help pay for any claims or lawsuits against your business. However, this type of insurance will not cover damage to the vehicle used by your business.
What else does commercial auto insurance cover?
While every Tennessee business owner must comply with the state law for auto insurance, this mandate only applies to liability coverage. This can protect you if one of your vehicles causes an accident, but it does not insure you against a mishap caused by someone else.
It’s worth considering these additional commercial auto coverage options to make sure you’re fully protected:
- Underinsured/uninsured motorist coverage insures you against personal injuries and damage involving a company vehicle, in case whomever caused the accident is unable to cover the full cost of damages.
- Medical payments coverage pays for medical expenses if employees and passengers are injured in a company-owned vehicle, regardless of who is at fault.
- Collision coverage helps pay for the cost of repairing or replacing your company vehicle if it’s damaged in an accident, regardless of who was at fault.
- Comprehensive coverage covers the costs of non-collision damages such as vandalism, theft, flood, or fire.
- Towing and labor coverage covers the cost of roadside assistance for company-owned vehicles.
- Loading and unloading coverage insures against the damage of equipment and materials during transport, loading, or unloading.
- Bobtail coverage is recommended when you’re using tractors without a trailer. It usually covers the insured vehicle at all times, even during non-work-related uses.
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Updated: February 21, 2024
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