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How Can a Commercial Auto Insurance Policy Benefit My Business?

How Can a Commercial Auto Insurance Policy Benefit My Business?

Feb 17, 2023

A commercial auto insurance policy in Florida can help protect your company in various ways. From being a financial safety net in the event of an accident, vandalism, or natural disaster to helping you get back on your feet with a rental vehicle, a commercial auto policy ensures that your business can continue to function as normal, regardless of what life throws your way. 

Today we are going to discuss in detail what commercial auto insurance is and the magnitude of benefits that come with insuring your company’s vehicles. This way, you can make an informed decision about whether or not this type of auto insurance is right for you and your business. 

The Coverage Provided by Commercial Auto Insurance

When you operate a vehicle for business purposes, your insurance agency has the right to reject your claim even if you have a personal auto insurance policy, as most insurance companies require you to file that you are using your vehicle for business use. This is why protecting your corporate vehicles with a commercial auto insurance policy is crucial. 

In a commercial auto insurance plan, you may be covered by the following:

  • Liability is the most basic coverage, it provides coverage if the business is found to be at fault in an accident that damages or injures others or their property. 
  • Collision protects damages to the business’s vehicle caused by a collision with another car or object, regardless of fault. It is important to note that collision is an optional add-on and without it, you will not be protected if found liable for the accident. 
  • Comprehensive protects against non-collision events such as theft, vandalism, weather-related damage, or fallen trees.
  • Uninsured/Underinsured motorist is coverage that shields the business if a driver that does not have insurance or is underinsured is responsible for causing the accident.
  • Medical payments coverage provides reimbursement for medical expenses incurred by the driver and passengers of the business’s vehicle in the event of an accident, regardless of fault.

The Benefits of Having a Commercial Auto Policy

The benefits of commercial auto insurance are numerous for businesses. For starters, it protects against significant financial losses from accidents involving business vehicles. These losses include repair or replacement costs, medical expenses, and legal fees. 

Getting a commercial auto insurance policy for your corporate vehicles will also ensure that you are maintaining the minimum requirements for your state laws around insurance (Later on in this article we will discuss the legal requirements behind commercial auto insurance and the state of Florida). With that said, if a business owner utilizes a vehicle for their company but fails to get the proper insurance, they may be liable for fines and consequences from the state government based on their location and the laws where they reside. 

Furthermore, a company auto policy can provide peace of mind for business owners and their employees, since it can be easy to become stressed out and disrupted by accidents involving company vehicles. With commercial auto insurance, a business owner can concentrate on running their company instead of worrying about unexpected losses, even in the event of an accident. 

Does Florida Require Commercial Auto Insurance?

The short answer is yes, commercial auto insurance is required in Florida for companies’ vehicles. All states require commercial vehicles to meet the minimum bodily-injury insurance that personal vehicles are required to. However, some states require much more coverage than the standard for personal vehicles, which can become quite costly for business owners. The good news is that companies can get a bit of a break on premiums in Florida due to the state’s lower insurance minimums.

Here is a breakdown of the Florida minimums according to

For individual drivers, the minimum coverage required is:

  • $10,000 bodily injury protection per person
  • $20,000 bodily injury per accident
  • $10,000 for property loss

A taxi must carry higher coverage limits of:

  • $125,000 bodily injury liability per individual
  • $250,000 bodily injury liability per incident
  • $50,000 property damage liability coverage

The minimums for commercial trucking insurance are:

  • $300,000 minimum liability insurance for household merchandise
  • $750,000 minimum for general freight
  • $1,000,000 liability for oil/gas transport
  • $5,000,000 liability for hazardous materials

The Average Premium for Commercial Auto Insurance in Florida

The vehicles owned by your business, whether they are one vehicle or a fleet, need to be protected by commercial auto insurance. The average cost of a company auto insurance policy will vary based on your needs, such as how many vehicles you are insuring, the types of vehicles, and how much coverage you opt for (partial or full coverage).

Since the premium cost is based on your specific needs and circumstances, it is challenging to pinpoint the exact cost of auto insurance for company vehicles. However, we have a good idea as to what the average plan will cost in the state of Florida. 

Bravo Policy states that after conducting a few studies, based on the typical needs of business owners and various insurance companies, the average commercial auto insurance policy in Florida costs about $2,565 and $3,370 per year. On the other hand, Insureon estimated that commercial auto insurance costs $142 a month or $1,704 a year on average. But, again, this is just the average cost, meaning that your premium could be higher or lower based on your specifics. 

Factors that Affect Your Overall Premium

As we briefly mentioned above and with a personal auto insurance policy, several factors can affect your premium when it comes to commercial auto insurance. We have created a list of a few examples and explanations on why these factors will affect your overall premium costs: 

  • Type of vehicle: The vehicle being insured is one of the primary factors affecting your premium. As with personal policies as well, the more expensive the vehicle, the higher the premium. This is because it cost more to replace the vehicle in the event of an accident. 
  • Driving history: The driving history of the individuals who will be driving the insured vehicle can also affect the premium. A history of accidents or traffic violations can result in a higher premium, while a clean driving record can lead to lower premiums.
  • Location: The location where the vehicle will be primarily used as well as where it will be parked, can also impact your premium. For example, the premium will likely be higher if the location has a high rate of accidents, thefts, or vandalism.
  • Coverage limits: It is probably no shock that higher coverage limits typically result in a higher premium, but it will also result in more security if an accident occurs. 
  • Deductible: The deductible is the amount you pay out of pocket before your insurance begins to pay in. A higher deductible will result in a lower premium. Still, it also means you’ll pay more out of pocket in the event of an accident. Hence, keeping your deductible within your out-of-pocket price range is important. 
  • Industry: The type of industry the business operates in can also affect the premium. For example, a business that primarily uses its vehicles for long-distance transportation will likely have a higher premium than a business that only uses its vehicles for local deliveries.
  • The number of vehicles: Insuring multiple vehicles is almost certain to raise your premium as you will require more coverage, yet sometimes it can lead to “per vehicle” discounts.

How to Choose a Policy for Your Company Vehicles

It is important to assess your business needs before choosing a policy for your company’s vehicles. Consider your vehicles’ type, usage, and risk level, as well as their use and maintenance. You will also want to take into account HOW much coverage you are looking for. Do you want collision and comprehensive too? What about your deductible, how much can you afford to pay out of pocket? By completing this evaluation, you will be able to determine the type of coverage you require and how much insurance you can afford. 

Once you have a good understanding of your needs, it’s essential to compare policies from different insurance providers to ensure that you are getting the best value for your money.

If you are looking to save some money on your insurance plan (who isn’t?)  you should look for any available discounts that could help lower your premium. You can do this by talking to an expert insurance agent, as they can help steer you in the right direction of the best rates and how you can save more on your premium.

The Bottom Line

Commercial auto insurance is an essential investment for businesses that use vehicles for their operations, as it offers protection against financial losses, ensures compliance with legal requirements, improves risk management, and provides peace of mind to business owners and employees. If you are unsure about what type of coverage you need or would like some guidance in making the final decision, reaching out to a professional agent can be dramatically helpful.

Are you looking for a reliable provider of auto insurance for your company vehicles in Florida? Our team at Del Toro Insurance is a great option to consider. We offer a range of policies that can be tailored to meet the specific needs of your business. With a reputation for providing exceptional customer service and competitive pricing, Del Toro Insurance can help you get the protection you need to care for your business and its vehicles. 

Contact our agents today to get a quote and learn more about our commercial auto insurance options. We promise to steer you in the right direction!

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