Commercial Vehicle Insurance

Reader’s Question:

Why is a commercial vehicle insurance quote higher than typical vehicle insurance quotes?

Henry

New York, NY

The main difference between a commercial vehicle and a regular vehicle that raises a commercial vehicle insurance quote is RISK. A commercial vehicle insurance quote is higher than typical vehicle insurance because there is more risk involved in a commercial vehicle. A commercial vehicle is used for business operations, usually for goods delivery or personnel transport, so it is often on the road and possibly used by several drivers. Such being the case, a commercial vehicle is potentially more likely to get into accidents. Since they may carry valuable products, they may also be more likely targets of theft. A regular personal vehicle, on the other hand, is relatively used less often; usually simply to drive to and from work. So a regular personal vehicle carries less potential risk.

Another reason why a commercial vehicle insurance quote tends to be higher is because this type of insurance is usually designed to cover a number of cars. Unless it’s a really small home-based business, most car insurance companies expect a fleet of at least three cars that need coverage.

When considering the level of coverage for commercial vehicle insurance, it is often advised that business owners take into account possible lawsuits against their business that may result if any of their company vehicles cause an accident. This factor also raises a commercial vehicle insurance quote.

Reader’s Question:

I’ve just started my own business for which I have purchased a reliable van to help me make deliveries. In the past, I have only had to get car insurance for my sedan, which is mainly for personal use. I would like to know how a commercial van insurance is different.

Kenny

Billings, MT

A commercial vehicle is defined by its purpose; Buses, taxis and vans specifically for the transportation of goods are considered commercial vehicles. In your application form for vehicle insurance, you are likely to be asked what the purpose of your van is. In this case, you must absolutely be honest and indicate that your van is for business.

Now, why get insurance? For one thing, it is a state requirement for every driver to have vehicle insurance – liability insurance at the minimum. But particularly, commercial van insurance must be obtained because vans for business ferry goods of value. A good coverage would protect the assets of any entrepreneur. Moreover, vans make easy targets for auto theft. This increased risk necessitates protection in terms of vehicle insurance.

Of course, Kenny, you can expect the monthly premium for commercial vans to be greater than cars for domestic purposes. Generally, the actual market value of a van may be higher. The mileage might also be greater. Both are important factors that affect what we all pay for car insurance premium.

Even though it is not mandatory, it would be wise to go with a comprehensive coverage. This way you are prepared for more eventualities that might lose your business a lot of money. There are some insurance companies in Montana that cater specifically to vans or business vehicles. Check them out and go shopping!

Reader’s Question:

I have a small home-based business. Right now I am confused whether to avail of personal vehicle insurance or commercial vehicle insurance? Can anyone help me?

Tina

Biloxi, MS

Tina, you forgot to include in your query a very important thing so that I could answer your question as properly as possible. That is the nature of your business. You see, the nature of your home-based business would highly affect your decision in choosing between personal vehicle insurance or commercial vehicle insurance.

For example, if your home-based business offers delivery service, you might want to consider purchasing commercial vehicle insurance. This is also highly advisable, number one: if you have a fleet of delivery vehicles; and number two: if you are expecting a great influx of job orders for delivery.

On the other hand, if your business does not entail you being on the road that often, I think that personal vehicle insurance would already to suffice to cover your insurance needs. An example is if you are a freelance real estate broker who would only be using your vehicle at a minimal amount of time.

Now, the most important thing you should remember is that in choosing the best vehicle insurance for your business, you should make a careful approximation of how frequent your vehicle is going to be on the road. Always remember that a vehicle that is always on the road is more exposed to vehicular accidents, and high exposure to accidents translates to higher vehicle insurance premium.

Reader’s Question:

Is it advisable to obtain commercial auto insurance quote online or from local companies?

Lucille

Pittsburgh PA

In obtaining a commercial auto insurance quote, you must get that kind of information from as many companies as possible, which means both online and insurers from your area. Going online is convenient and fast. You will only need to fill up a few short forms and afterwards you already have the commercial auto insurance quote you need. Online calculators are quick and convenient but they cannot provide you with the most accurate figures for your insurance needs.

This is the advantage of local companies. With local companies, you can talk to their insurance agents and discuss your needs before they will issue a commercial auto insurance quote. What you should do is to combine these two sources of information so that you get the best deal in the end. This will also provide you with an opportunity to check which among the online quotes and those from the local companies are nearest to one another. If you find out that online quotes are quite reliable and accurate, you will know where to go next time you need an insurance quote. Another use of online companies is for you to know right away the discounts and promos they are currently offering to their customers and prospective clients.

Reader’s Question:

What are the things to look out for when getting comercial vehicle insurance?

Jonathan

Gulfport, MS

Comercial vehicle insurance is something very basic for your business. In many ways, it is similar to personal car insurance, but only up to an extent. You must understand and know these elements to make an informed judgment on your comercial vehicle insurance.

There are two mandatory features: physical damage insurance and liability insurance. Physical damage insurance includes collision insurance and comprehensive coverage. Liability insurance on the other hand consists of bodily injury, property damage, uninsured motorist, and under-insured motorist. The definitions of terms are the same to those applied in personal car insurance.

However, there are other factors to consider when getting comercial vehicle insurance. You need to extend your coverage in terms of what exactly your needs are for your business and how much you can afford. A comercial vehicle insurance is not just another fancy way of selling you more insurance; it is, in fact, added protection for your business. If the car registered under your business figures in an accident and you get sued, your liability insurance would not be able to cover everything. Different companies have ways created forms of coverage that would protect your business from very expensive legal costs and obligations.

My business is running really slow this year. I am thinking if I still need to get insurances for my car I used for deliveries. How can a commercial vehicle insurance policy protect my car?

Michael

Meza, AZ

The first thing to do before shopping around for an insurance policy is to consider the size of the business.

If you are an entrepreneur with no employees and use your personal vehicle to drive yourself around for errands then a personal vehicle policy will be more than enough to meet your needs.

However, if you have a company that relies heavily on transportation to sustain its operations, then a commercial vehicle insurance policy is necessary to provide the adequate amount of security and protection.

Next, companies should also look into employees who use their own vehicles to run business-related errands. Management must ensure that these employees have their own personal vehicle policies that have policies carry sufficient liability coverage to prevent the company from footing the bill for these unfortunate occurrences. In the absence of personal auto policies, the company can opt for a drive other car policy, which is recommended for corporations or joint ventures.

If, for example, the employee figures into an accident with another driver and this driver opted to press charges against the driver and the business owner, the company must have a commercial vehicle insurance policy with an additional non-owned auto liability endorsement in order to protect its assets.