So, you want to be a truck driver? We don’t blame you. But it’s important to remember that driving a commercial vehicle requires a separate set of regulatory standards.
One of the major differentiators is the insurance you are required to obtain. The government is very specific in the type of insurance required to operate large commercial vehicles.
What Is Commercial Auto Insurance?
Commercial auto insurance is designed to provide protection for vehicles designated for business use. Commercial auto insurance protects owner and operator from potential property damage and liability.
Even if you are driving a personal automobile, if it’s for business use, you will need commercial auto insurance, as you will not be covered under a personal auto policy.
|
|
What Does It Cover?
While options and terms vary from company to company, there are a number of standard options that most types of commercial auto insurance will cover.
Typical coverage options include:
- Property damage
- Bodily injury to others
- Optional bodily injury occurring outside of the state you reside in
- Personal injury to you, your employees or passengers. Usually includes medical expenses and lost wages
- Collision coverage for accident costs, regardless of fault
- Comprehensive damage coverage
- Medical payments, including the cost for hospitalization, treatment or potential funeral expenses
- Uninsured or underinsured motorist coverage
- Loading and unloading liability
- Loaner transportation in the event your vehicle is being repaired.
- Towing and labor
How Does It Work?
Commercial auto insurance works much the same way personal auto insurance does. The difference is that, as a business owner, you can get commercial coverage for anywhere from one to a fleet of vehicles.
Commercial policies also provide a dearth of options designed to accommodate the typical business owner. Policies can be adjusted and separate coverage types custom-tailored to the specific business need.
Many large fleets opt for a commercial umbrella policy, which covers the costs of large liability claims when they exceed the limits of the standard liability policy for one vehicle. This method provides payments in $1 million dollar increments, and covers both the cost for liability claims and potential lawsuits.
When Will You Need It?
If you are using a vehicle for business purposes, you will need commercial auto insurance. This includes any vehicle type that has a commercial license plate or tag and is registered as a commercial automobile.
This also includes vehicles being used by your employees during the course of business. If you own a vehicle or fleet of vehicles being used for any of the following functions, you will need commercial auto insurance:
- Using a vehicle to carry equipment
- Using a vehicle to haul freight
- Using a vehicle to transport hazardous or flammable material
- Using a vehicle to transport housekeeping equipment for business use
- Using, carrying or transporting winches, plows, cranes or other types of construction equipment
- Hiring your vehicle out for various purposes
- Delivering pizza, newspapers, or any other form of wholesale or retail product
- Transporting people, whether it be as a chauffeur, limousine, or taxi
Depending on the state you live in, some occupations – such as newspaper and pizza delivery people – may be covered under standard auto policies. Other than that, a commercial auto insurance policy is required.
|
|
How Much Does It Cost?
The cost of commercial auto insurance is almost always more than you would pay for standard auto insurance.
You also need to factor in the driving records of yourself or your employees. Just as would be the case with personal auto insurance, a bad driving record will raise your rates.
The type of vehicle you use will also affect your rates. Vehicles used in construction and farming typically have the lowest rates, while heavy duty cargo vehicles transporting loads of 10,000 pounds or more will carry the highest.
Where Can You Get It?
There are a number of ways to get commercial insurance policies. First, you’ll want to verify which forms you will need to file. Usually the insurance company can do this for you, but for a list of the types, click here.
The FMCSA also provides you with the information you’ll need, as well as the various methods of getting the information over to them.
For a list of state requirements, as well as potential insurers in your area, visit the national DMV website and input your zip code.