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Commercial Auto Insurance | Business Coverage

Commercial auto insurance companies offer commercial auto insurance coverage that has higher liability limits than personal auto insurance policies. Commercial auto insurance quotes will reveal that commercial auto insurance costs vary dramatically by vehicle types like limousines and 18-wheelers. Shuttle services, fleet services, and delivery services must have a commercial auto insurance policy.

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best...

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UPDATED: Jul 28, 2020

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Commercial TruckOn the surface, commercial auto insurance can seem very similar to personal auto coverage.  After all, both policies provide protection for a motor vehicle against a variety of perils, and both offer liability protection for car accidents.  However, commercial auto insurance differs from its personal counterpart in a few important ways, including the scope of the policy.

If your business requires the use of one or more vehicles, you probably need to carry a commercial auto policy.

How Commercial Auto Insurance Differs from Private Coverage

In terms of coverage, commercial and private auto policies are usually pretty similar; each can have collision, comprehensive, bodily injury and liability coverage.  However, the liability limits of a commercial policy will tend to be higher than those for personal insurance as commercial drivers are open to more risks and litigation.

Additionally, commercial policies will have a greater scope.  They are designed to pay for large fleets of vehicles or very expensive custom vehicles that would not usually be owned by private individuals.  Different types of commercial policies apply in these situations.  For example, some policies are made for fleet companies while others are designed for taxi services.

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Who Needs Commercial Car Insurance?

Any company that uses vehicles as part of its business should consider purchasing commercial auto coverage.  A few businesses have a particularly high need of this type of insurance:

  • Taxi, shuttle and limo services
  • Fleet services
  • Delivery services
  • Any business that requires driving clients from one location to another

These types of businesses carry high liability risks, and the price of a claim can be extensive if an accident were to occur.  Carrying the appropriate amount of auto insurance can protect the company from devastating lawsuits in the wake of a car accident.

Many people mistakenly complete business-related activities in their privately insured vehicles, not realizing that this could result in a denied claim if the insurer found out.  It’s always better to be safe than sorry when purchasing insurance coverage, and check with your insurance company before using your personal car for business tasks.

How Much Does Commercial Auto Coverage Cost?

The cost of a commercial auto policy will depend on your company’s risk level and the type of protection you require.  The expense of insuring a fleet of 18-wheel tractor trailers will be different from that of a limousine service. It is important to have your business analyzed by multiple insurance companies in order to get personalized quotes. This will give you sense of how much it costs to insure your vehicles.

About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

3 Comments

  1. I have been with lancer insurance for 15 yrs and I took my insurance off for 3 mo to do some updates on my truck and I went to renew and you almost tripled my premium …. What is that all about ????? Please let me know why you would do that ???? DAVID HUNTER ….

    Reply
  2. Hello Eric, I am Najeeb from Fairfax County VA. I am a Limo driver in DC metro area currently insured by Northland Insurance company. This year is February my limo insurance was up for renewal. My insurance agent told me that insurance premium is gone up because I have an open file with Northland. Upon inquiring with Northland told me in writing that there is no open file under my name and or policy. I showed that info to the Gulati Insurance Agent but they gave me lame excuses and refuse to review hike in premium. I have written to Northland but they never replied. Please help me and or educate me how to reduce premium on Commercial Insurance of Limo.

    Reply
    • Hi Najeeb,

      That certainly sounds odd.

      The first thing to know is that the insurance agent is not involved in the pricing of your policy as it pertains the Northland’s underwriting. The second thing is to make sure the agent isn’t tacking on additional fees without telling you. Some third party agents/agencies are allowed to charge their own fees on policies, so make sure that they are not lying about it.

      Finally, premiums change. Its just the way it goes. Northland could have changed the way they calculate premiums, or they simply went up because the cost of business is rising. When insurance companies have increasing claims, they generally raise rates across the board to cover the cost. With gas prices being relatively low for a good part of the year, more people have been driving which means more accidents.

      Best,
      Eric Stauffer

      Reply

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