Components Of Commercial Auto Insurance
Commercial auto insurance is composed of different coverages. Refer to the image below for a quick reference.
Auto Liability Coverage
Commercial auto insurance helps if your commercial vehicle causes an accident and injures third parties and damages properties. This is done through its auto liability coverage.
The auto liability coverage of commercial auto insurance will pay the medical expenses of third parties injured by your business’s vehicle. It will also reimburse the losses of those who had their property damaged.
If ever affected parties decide to sue, auto liability coverage will help you cover settlements. And in case they won’t settle, auto liability coverage can provide funds you can use to pay attorney fees, investigation fees, administrative fees, and other legal defense costs.
Note that states have guidelines about how much auto liability coverage your commercial auto insurance must offer. Here’s a table that shows the state minimums:
| Per Person Bodily Injury Limit | Per Property Damage Coverage Limit |
|---|
| Alabama | $25,000 | $25,000 |
| Alaska | $50,000 | $25,000 |
| Arizona | $25,000 | $15,000 |
| Arkansas | $25,000 | $25,000 |
| California | $15,000 | $5,000 |
| Colorado | $25,000 | $15,000 |
| Connecticut | $25,000 | $25,000 |
| Delaware | $25,000 | $10,000 |
| Florida | None | $10,000 |
| Georgia | $25,000 | $25,000 |
| Hawaii | $20,000 | $100,000 |
| Idaho | $25,000 | $15,000 |
| Illinois | $25,000 | $20,000 |
| Indiana | $25,000 | $25,000 |
| Iowa | $20,000 | $15,000 |
| Kansas | $25,000 | $25,000 |
| Kentucky | $25,000 | $25,000 |
| Louisiana | $15,000 | $25,000 |
| Maine | $50,000 | $25,000 |
| Maryland | $30,000 | $15,000 |
| Massachusetts | $20,000 | $5,000 |
| Michigan | $50,000 | $10,000 |
| Minnesota | $30,000 | $10,000 |
| Mississippi | $25,000 | $25,000 |
| Missouri | $25,000 | $25,000 |
| Montana | $25,000 | $20,000 |
| Nebraska | $25,000 | $25,000 |
| Nevada | $25,000 | $20,000 |
| New Hampshire | $25,000 | $25,000 |
| New Jersey | None | $5,000 |
| New Mexico | $25,000 | $10,000 |
| New York | $25,000 | $10,000 |
| North Carolina | $30,000 | $25,000 |
| North Dakota | $25,000 | $25,000 |
| Ohio | $25,000 | $25,000 |
| Oklahoma | $25,000 | $25,000 |
| Oregon | $25,000 | $20,000 |
| Pennsylvania | $15,000 | $5,000 |
| Rhode Island | $25,000 | $25,000 |
| South Carolina | $25,000 | $25,000 |
| South Dakota | $25,000 | $25,000 |
| Tennessee | $25,000 | $15,000 |
| Texas | $30,000 | $25,000 |
| Utah | $25,000 | $15,000 |
| Vermont | $25,000 | $10,000 |
| Virginia | $25,000 | $20,000 |
| Washington | $25,000 | $10,000 |
| Washington D.C. | $25,000 | $10,000 |
| West Virginia | $25,000 | $25,000 |
| Wisconsin | $25,000 | $10,000 |
| Wyoming | $25,000 | $50,000 |
Collision Coverage
The collision coverage of commercial auto insurance covers repair or parts replacement if your commercial vehicle got damaged after colliding with a car or an object.
Collision coverage doesn’t cover the repair or replacement of your commercial vehicle’s aftermarket parts. Coverage doesn’t apply to normal wear and tear too.
Comprehensive Coverage
Aside from collision coverage, commercial auto insurance offers comprehensive coverage. This covers the repair or replacement of parts if your commercial vehicle sustained damage due to:
Similar to collision coverage, comprehensive coverage doesn’t cover normal wear and tear, and aftermarket parts.
Rental Reimbursement Coverage
Insurance companies foresee that damage may render your commercial vehicle unusable for a while. And as a result, you might need to rent one. This is why commercial auto insurance has rental reimbursement coverage, which refunds vehicle rental expenses and minimizes the losses
Roadside Assistance Coverage
Roadside assistance coverage helps to cover out-of-pocket expenses if your commercial vehicle suffers a mechanical breakdown at a specific distance. Particular costs covered are:
Uninsured/Underinsured Motorist Coverage
Your commercial auto insurance can have uninsured/underinsured motorist coverage. If your commercial vehicle got involved in an accident caused by a driver with no auto insurance or doesn’t have enough of it, uninsured/underinsured motorist coverage will cover the indemnification for bodily injuries or property damage you would’ve received.
Medical Payments Coverage
Offered by commercial auto insurance if you’re in a fault state, medical payments coverage takes care of your commercial vehicle’s driver and passengers (if there are any) in the event of a vehicular accident. This will pay for hospitalization and medical treatment. Coverage applies regardless of fault.
Personal Injury Protection Coverage
If you’re in a no-fault state, commercial auto insurance can have personal injury protection coverage. Personal injury protection coverage also pays for treatment and hospitalization. But note that coverage further applies to lost wages, medication, retraining, and rehabilitation.
Gap Insurance
Gap insurance is useful if your business’s vehicle is leased or is on a loan. If the commercial vehicle is declared a total loss, GAP insurance will cover the difference between the actual cash value of the commercial vehicle and the amount you owe for it.
Short-Term Commercial Auto Insurance
Short-term commercial auto insurance, also called temporary business car insurance, is a specialty coverage for individuals who occasionally use their personal vehicles for business purposes.
Inclusions in temporary business car insurance are auto liability coverage, collision coverage, comprehensive coverage, and uninsured/underinsured motorist coverage.
So how long does the policy’s protection last? It’s up to you actually. You get to decide your short-term commercial auto insurance to provide coverage for one hour, 6 hours, 12 hours, 24 hours, and up to a few days.
Food Truck Insurance
Your food truck may be your dream business that came true or the beginning of your goal of having your restaurant someday. You probably know that you are driving around a 5-ton truck carrying propane tanks and other flammables, and with one wrong move, your vehicle can blow up like a missile. That is how exposed your food truck is to the risk of explosion and even other accidents.
Before that happens, consider getting food truck insurance or food trailer insurance to be protected from this and other unfortunate life’s qualms.
Don't worry. Its annual premium is much less than the trouble you have to face when accidents arise. There are only several factors that affect the cost of food truck insurance: the type of food you sell, the value of your truck and equipment inside, and the add-ons you wish to avail.
Dump Truck Insurance
Another type of commercial vehicle insurance explicitly written for a kind of vehicle is dump truck insurance. Because dump trucks are highly specialized hauling vehicles, they require specialized insurance.
Dump truck insurance protects businesses that own dump trucks from many of the risks that come with operating these trucks, which may include its cargo that may not be material in small quantities.
This offers a mixture of property and liability coverages, which may include the following: auto, general liability, physical damage, downtime, environmental liability, motor truck freight, or cargo.
When underwriting policies and pricing is conducted, brokers consider the dump truck route, how they’re used, and the hazards that operate them. Hence, if you are running a for-hire dump truck, take your step now to get yourself, your trucks, and your business insured.
Hotshot Trucking Insurance
Hotshot trucking encompasses delivering goods in a short time frame; thus, goods must be delivered on time. Usually, they pull construction materials, heavy equipment, machinery, or farm materials.
Hauling for hire companies is a high-reward business but also high-risk. Accordingly, hotshot trucking insurance is necessary. This will protect the company from third-party liability claims such as bodily injury or property damage.
Box Truck Insurance
Many businesses rely on box-type trucks to transport goods such as retail stores, moving companies, couriers, and many more. Although box-type trucks come in various sizes and are lightweight, they usually transport expensive goods such as furniture and appliances.
Hence, a box truck insurance is required. Typically, the protection it offers is similar to the commercial auto insurance but with additions. First is cargo insurance, which will provide a safety net to your company if, in the case during transportation, the cargo is damaged. Second is a non trucking liability coverage, which will cover liability-related costs if you cause an accident with your box type truck while it is not in dispatch.
Commercial Truck Insurance
Trucks are more massive and more challenging to maneuver, which increases the risk of being involved in an expensive accident. Thus, experts designed a protection product specially for it, the commercial truck insurance, or known as semi truck insurance.
Its coverage is almost the same with regular commercial auto insurance but with more options for add ons such as bobtail insurance, unladen insurance, and MCS90 endorsement.
The government even required all trucking companies to file proof of commercial truck coverage for semi trucks and other vehicles used for hauling cargo.
So how much is commercial truck insurance? There’s no fixed cost. Some factors that influence its premiums are traffic tickets, type of cargo hauled, operating radius, etc.
