Commercial Auto insurance

Commercial Auto insurance

Commercial Auto Insurance protects businesses against claims arising from accidents involving vehicles used by the business. Coverage includes third-party liability and physical damage.

Factors That Determine Cost of Commercial Vehicle Insurance

There are many different types of small businesses that use vehicles as part of their profession. And since there are several different factors affecting the cost of commercial vehicle insurance, it’s wise for business owners to understand which factors relate to their business and how those factors may affect their bottom line.

Here are the primary factors that determine the cost of commercial auto insurance:

  • Type of Vehicle: Generally, larger, heavier vehicles will need more coverage.
  • Value of Vehicles: The premium for physical damage coverage is often a percentage of the vehicle’s value. Therefore, a higher value will translate to higher premiums.
  • Number of Vehicles/Employees Driving: More vehicles and employees driving will mean higher risk exposure, more coverage needs and higher premiums.
  • Distance/Radius of Travel: Long distance, especially when crossing state lines, will add to the cost.
  • Coverage Types: You may need to add endorsements to the policy that apply to your business.
  • Coverage Limits: Higher limits on coverage will translate into higher premiums.
  • Deductibles: If you can afford the risk, raise your deductible. Higher deductibles will mean lower premiums.
  • Cargo Type: If you’re hauling cargo, risk and premiums will be much lower if you’re hauling hay compared to hauling a hazardous material like fuel.
  • Loss History: Insurance companies will often decrease premiums with a history of zero claims.
  • Type of Business/Operation: Certain business operations tend to have higher risk and are generally rated higher than the other

Who needs Commercial Auto Insurance?

Any type of small business that use vehicles as part of their profession e.g. Painters, Construction Crews, Plumbers, Electricians, Janitors, Housekeeping team, Contractors, Delivery Business, Landscapers, Restaurant Owners, Grocery Store Owners, Furniture Stores, Renovators, Concrete Mixers, Trucking, Garage Owners etc

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