If your business needs commercial auto insurance whether it’s for a single vehicle or a whole fleet, you want commercial insurance that is both affordable as well as provides proper protection. Below are a few tips for buying commercial auto insurance that will help you manage costs but at the same time ensure you’re properly protected.
Check employee driving records before you hire. When hiring an employee, who will drive a company vehicle or use their own vehicle as part of their job, perform a Department of Motor Vehicles screening before hiring because the driving records of employees impacts your premium. Having employees with good driving records listed on your commercial auto policy will help keep your premium low. Employees with poor driving records not only adversely affect your premiums but can put the entire future of your business at risk.
Buy ‘hired & non-owned vehicle’ coverage. Employees often use their own vehicles for business errands/purposes. Also, you may borrow a vehicle or rent a car on a business trip. These are situations where a commercial auto policy excludes coverage unless you purchase optional Hired and Non-owned Auto Liability and Hired Auto Physical Damage coverage. It’s a small additional cost to ensure you’re protected.
Make sure your insurance carrier will add an “additional insured”. If your business involves contracts that could require you to have another party added as an additional insured to your policy, be sure the carrier you chose can handle this need.
Buy ‘driver other car’ coverage. If you own the business and don’t have a separate personal auto policy because all vehicles are owned by the company, be sure to add this coverage to your commercial auto policy so that you (and your spouse) are covered if you drive another vehicle for personal use (excluding other vehicles owned by a household member), i.e. borrowing a friend’s car. It provides coverage similar to a personal auto policy.
Buy ‘rental reimbursement’ coverage. If your company vehicle is damaged in an accident and has to go into the shop for repairs, this coverage will help to cover the costs of renting a replacement vehicle.
Purchase higher limits for better protection. Understandably you want to keep your premiums low, but there’s no more expensive policy than one that doesn’t have sufficient coverage to protect you if you’re sued. In today’s litigious society, people sue quickly and judgements can be in the hundreds of thousands of dollars or more. Don’t skimp on liability coverage. If your business needs more coverage than available on an auto policy, consider an umbrella liability policy to extend your protection.
Combine commercial auto with a BOP or package policy. Having your Commercial Auto with the same carrier that writes your Business Owner Policy or Package may provide you with an opportunity for discounts depending on your situation.
Pay with EFT. Many insurance companies will waive installment fees if you make your payments using Electronic Funds Transfer withdrawal of your payment from your bank account. Not only does this save on fees, but it can save you time and avoid the possibility of missing a payment, which can result in late fees as well as possible cancellation.
Increase your deductible. The higher your deductible, the lower your premium, so evaluate what you can afford to pay if you have to file a claim. Over time, the premium savings can offset the deductible amount you’d have to pay. Be sure not to set the deductible to an amount you can’t afford easily because claims can happen at any time.
NOTE: This information is only a general description of the available coverages and is not a statement of contract. All coverages are subject to all policy provisions and applicable endorsements. Some coverage may be subject to individual insureds meeting underwriting qualifications and to availability within a state. For further information contact a Murphy Insurance Agency Associate.