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Commercial Auto Insurance—What is it and What are the Advantages?

Aug 01, 2022

Insurance is a must when protecting every aspect of your company. An insurance company can drastically reduce the amount of money you will have to pay out of pocket when an accident happens, and damage occurs. Keep in mind that all parts of your company are valuable in their own way. If this weren’t true, then you wouldn’t waste time and resources to maintain them. With that said, when it comes to getting an insurance policy, it is important to remember to insure more than just your commercial space. 

What Else Should You Get Covered?

Often times commercial vehicles are used in conducting your business. For example, you may use cargo vans, trucks, or even cars to transport goods, deliver services, travel to clients, and more! These vehicles are considered company property and need to be insured correctly to protect them from accidents or liabilities. Without proper coverage, you can risk costly out-of-pocket expenses that come with vehicle damages. 

When it comes to company vehicles, the process of covering them is a bit different than the process of insuring your personal vehicle. This is because company vehicles often have multiple drivers, longer-distance rides, and higher damage risk. As a result, insurance companies will require you to get a commercial auto insurance policy. 

So, what is commercial auto insurance, and what are the advantages of having it on your company vehicles?

Commercial Auto Insurance

Commercial auto insurance in Florida is a policy that protects against physical damage and liability coverage. Commercial auto insurance applies to vehicles that have the potential to experience damage when used for business purposes. This type of insurance policy will cover vehicles such as 

  • Box trucks
  • Food trucks
  • Work vans
  • Service utility trucks
  • Dump trucks
  • Forklifts and other construction vehicles
  • Company cars

Side note: Other common names for commercial auto insurance are commercial car insurance, truck insurance, or fleet insurance. If you hear any of these terms, remember that they usually mean the same thing as commercial auto insurance. 

Who Should Purchase Commercial Auto Insurance?

It may be fairly obvious that if your business relies solely on using business vehicles, such as delivery trucks or tow trucks, you will want to have commercial auto insurance to cover potential damages. However, determining whether you need a commercial auto policy may be more difficult if you are self-employed and make use of your personal vehicle. I mean, odds are you already have that vehicle insured under a personal auto insurance policy, so is a commercial auto insurance policy important in this case?

When weighing your options on whether to get a commercial policy or not, consider talking to an insurance agent. Insurance representatives are experts in determining what you do and don’t need in order to be fully covered in the event there is an accident. They will often ask questions about what you use the vehicle for regarding your business, how often you use it, and how far you typically drive it. From there, an insurance agent can help explain your options and make recommendations based on their knowledge!

What Are Its Advantages?

Another way to decide if commercial auto insurance, more specifically Florida commercial auto insurance, is for you is to understand the advantages. Becoming familiar with the benefits of protecting your car with a commercial policy will help you decide whether or not it is worth investing in. 

#1 It Provides Third-Party Protection

Suppose a collision occurs while operating a company vehicle covered by commercial auto insurance. In that case, you won’t be expected to pay for the damages because your insurance will kick in. This applies to your vehicle and in cases where damage is sustained to other vehicles, property, and even bodily injuries. 

#2 Full-Coverage is Included

As mentioned above, commercial auto insurance will cover any physical vehicle damages or medical expenses after an accident, regardless of whose fault it was. Additionally, you can expect to be covered by comprehensive insurance as well.

Under comprehensive insurance, your policy will protect you from the costs of natural disasters, floods, break-ins, vandalism, fires, and more. Comprehensive insurance is important to have on commercial vehicles because vandalism or other types of vehicle destruction can put a hold on your company’s schedule, which can damper your overall financial growth.

#3 Coverage Against Theft

If your company car is reported stolen, you can file a claim through your commercial auto insurance agency. Your policy will provide you with a settlement amount that pertains to the stolen car, allowing you to purchase a replacement.

#4 Towing Services and Roadside Assistance

Your company vehicles may be a vital component of running your business. However, that does not make them immune from breakdowns or flat tires. Towing services and roadside assistance are typically included in Florida auto commercial insurance. This way, you can get help and continue to focus on the important stuff, your company!

#5 Bulk Insurance Discount Rates

The last benefit to enrolling in a commercial auto insurance policy applies to companies with multiple commercial cars to insure. Most insurance companies will insure multiple company vehicles under a commercial auto insurance bulk policy. This will allow you to file claims against any company vehicles in the easiest way possible. A bulk insurance policy also provides your business with the most affordable insurance rates and the lowest possible premium based on your coverage.  

Does Commercial Cost More than Personal Auto Insurance?

When it boils down to the difference in cost between commercial and personal auto insurance, you should expect to pay more for commercial auto insurance in Florida. Commercial policies will cover multiple drivers and vehicles and even insure those with historically poor driving records. 

The average cost you should expect to pay for commercial auto insurance policies varies based on various factors. These deciding factors include, but are not limited to:

  • Your company’s industry and the risks that come with it
  • The number and types of vehicles you are insuring
  • How often and how far will the vehicles be driven
  • Employee driving records
  • The type of coverage you choose

If you are looking for a specific number, the median cost of commercial auto insurance is $142 per month or $1,704 per year. However, again this median price varies based on the abovementioned factors. Therefore, you can be well above or below it based on your company’s risk profile. 

The easiest way to find an affordable and suitable policy for your company vehicles is to talk directly to an insurance agent. They can help walk you through what you need and what you don’t so that you can rest assured that you are covered but never overpaying. 

How to Compare Auto Insurance Agencies?

Investopedia recommends checking with your current personal policy provider to see if they offer any commercial auto insurance policies. Keeping all your policies connected to one agency can help to keep everything organized. Additionally, you may be able to get your current agency to give you a discount or negotiate an affordable premium on your new commercial policies if you have a good and long-standing relationship with them.  

When comparing policies and insurance agencies, it is essential to take into consideration a few other key components

  • Coverage options for liability, collision, and comprehensive
  • Add-on coverage options for trailers or rental vehicles
  • Minimum and maximum policy limits
  • What vehicle types are covered
  • Premium and deductible rate
  • If there are any premium discounts offered for bulk insurance policies

It would be best if you always shopped around when it comes to insurance; some agencies will be able to make you better offers than others. Rushing into a policy can cost you more than necessary and can even leave you without the proper coverage for your company vehicles. 

The Bottom Line

Choosing whether to purchase commercial auto insurance is a personal business choice. The need for it depends on your particular company’s needs, vehicle usage, and the number of company cars and drivers you have. However, commercial auto insurance can bring business owners plenty of benefits and provide an affordable financial safety net around their company vehicles. For example, suppose your company uses various vehicles to conduct business. In that case, investing in a commercial auto policy is highly recommended and more cost-effective.

If you are struggling to determine if commercial auto insurance should be a consideration of yours, reach out to a professional. Insurance agencies will always be your best bet for narrowing down what policies your company should have and which ones are deemed unnecessary. 

Stay safe, stay protected, and happy auto insurance shopping!

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