Commercial auto insurance is a type of insurance policy that includes liability and physical damage and adds extra coverage to shield a company from financial loss when using a vehicle for business purposes.
Understanding the distinction between personal auto coverage and commercial auto policy is crucial for business owners. It makes sense that your business will require some form of transportation, whether getting to and from the office or going to a job site.
Unfortunately, there are several myths about commercial auto insurance, such as:
MYTH: Although I use my vehicle for work-related purposes, I am not self-employed. My auto coverage will cover any losses.
TRUTH: Most likely not. If you use your car for anything other than personal travel, you should either upgrade your auto insurance to cover business travel or get a commercial auto policy.
MYTH: My tools and equipment are covered if I leave them in a commercial vehicle.
TRUTH: Typically, equipment that is affixed to the vehicle permanently will be covered. Unless specific coverage for objects in transit has been specified, loose tools, tool boxes, equipment, and supplies will not be covered.
MYTH: When my staff operates my commercial cars, they are covered by insurance.
TRUTH: This isn’t always the case because some insurance providers demand that all business vehicle drivers be listed on the policy. Drivers permitted to operate the vehicle are covered if your commercial auto policy has “permissive use” coverage.
MYTH: Since my business is seasonal, I don’t need to keep my commercial auto policy active when it’s not in use.
TRUTH: There are two justifications for keeping your commercial auto insurance during a brief outage. The first justification is that keeping the policy in place would likely result in a lower insurance rate than starting it back up later. Second, terminating the contract will give you zero insurance protection for your parked cars.
If you want to continue protecting your company vehicles from theft, vandalism, or fire during downtime, it is recommended to consider comprehensive-only insurance.
MYTH: Because I deliver packages, my auto insurance covers my car.
TRUTH: When you drive for pleasure, to and from business, or for other personal reasons, your auto policy protects you from liability claims. If you are self-employed and use your vehicle for work, personal auto insurance will not cover you.
MYTH: If your automobile is stolen, vandalized, or damaged by falling tree limbs, hail, flooding, or fire, your insurance will pay for it.
TRUTH: It may not be cost-effective to purchase these coverages if a car is worth less than $1,000 or less than ten times the insurance rate. However, you need collision and comprehensive insurance to protect your automobile from all forms of damage adequately.
Your company is more than just a place where you spend eight or more hours daily. It is the cause of your family’s ability to put food on the table and have a roof over their heads. It puts much effort into helping you. Thus, it deserves to be preserved. Speaking with an independent insurance agent and obtaining the appropriate level of coverage for your risk profile are the best ways to protect it.
This blog discusses the most common commercial auto insurance myths. Let us assist you in locating the insurance that will best serve the needs of both your business and your employees. Then, for a quick, affordable quote, contact us right away.
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