Commercial auto insurance covers collisions, property damage, bodily injury, comprehensive physical damage (theft, vandalism, flood, and other risks), and damages stemming from underinsured motorists for vehicles used for business purposes. Because individual automobile policies will not cover business use, a separate policy is required.
Commercial auto insurance is required for any vehicle that is registered as a commercial vehicle or carries a commercial license plate or tag. More broadly speaking, anytime a vehicle is used for business purposes, commercial auto insurance is needed.
Applicable business vehicles can range from a bucket truck to the car an employee uses to purchase supplies. Personal auto insurance policies will not cover damages arising from such uses, leaving you, the business owner, exposed to risk. A commercial auto policy will close the gap and make sure you can rest easy.
Commercial auto and personal auto insurance work in similar ways. Both cover the same set of risks and the claims process is largely similar. Both policies also require the insured to pay a deductible before the payout begins.
Commercial auto policies, however, take into account the different types of vehicles and usage patterns that come with the business. For example, a dump truck or large tractor-trailer is much larger and heavier than a personal car and therefore has a greater potential to cause property damage and personal injuries. The right commercial auto policy will be tailored to the specific needs of your business, ensuring that you’re paying for exactly what you need.
While policy specifics can vary, most policies will cover the following:
|Bodily Injury Liability
|Covers the costs of bodily injury or death and related lawsuits that a commercial driver causes others, often including the cost of a legal defense, if necessary
|Property Damage Liability
|Protects you in case a commercial vehicle damages another person or business’ property, often including the cost of a legal defense, if necessary
|Pays for damages incurred when another vehicle or
|Medical Payments and Personal Injury
|Covers the medical expenses of the driver and any passengers in a vehicle used for a business purpose, often regardless of fault
|Like personal auto coverage, comprehensive coverage protects against damage to a commercial vehicle from fire, vandalism, theft, falling branches, and other similar risks that don’t involve another vehicle.
|In the event of an accident in which the at-fault party is uninsured or underinsured, this coverage pays for injuries and property damage.
Given the variability in business operations and the types of commercial vehicles available, it’s difficult to provide a benchmark or estimate. For small business owners, the cost typically ranges between $700 – $1,200 a vehicle, but that’s a general guideline.
Our highly trained agents will take the time to understand your business and the types of motor vehicle risks you face. From there we can determine the amount of coverage you need and compare prices across several insurance companies to get you the very best deal.
Is commercial auto insurance required in Texas?
Yes, Texas law requires all commercial vehicles to carry liability coverage. The required minimum coverage amounts vary by type of vehicle. This table outlines the coverage requirements.
How does commercial auto insurance work?
The process is very similar to personal auto insurance. In the event of an accident, you file a claim with the insurance company, who will then determine the appropriate payout amount, minus any applicable deductible.
Will personal auto insurance cover a commercial vehicle? What if I use my personal vehicle for occasional business use?
Generally, personal insurance will not cover incidents that occur while the vehicle is being used for business purposes, especially if that activity is regular or hazardous in nature. If you are using a personal vehicle for very limited or occasional business use, it’s possible that the personal policy will cover an incident, if you have sufficient liability coverage. If you think you might need commercial auto insurance, it’s best to consult an agent.
I drive for Uber and Lyft. Do I need commercial auto coverage?
Ridesharing companies typically provide coverage for incidents that occur during a paid ride but it’s less robust while a driver is waiting for a ride. Many major insurance companies now offer rideshare insurance policies that are tailored to the specific needs of this new industry. If ridesharing is your vehicle’s only business use, rideshare insurance alone may meet your needs.
Can my umbrella insurance policy contribute to commercial auto damages?
Yes, umbrella insurance is often used to augment other policies like commercial auto and provides an additional layer of security.
Is commercial auto insurance tax deductible?
Yes, it is a deductible business expense.
Call us at 281-998-2500 for immediate assistance or get a quote online to find out how we can get you protected.