Several factors determine whether a vehicle used for business should be covered by a personal or commercial policy. Key questions to consider:
- Who owns or leases the vehicle, you individually or the business as an entity?
- Who drives the vehicle, you or your employees?
- How is vehicle used most of the time, i.e., for transporting people, delivering documents or moving hazardous materials?
Commercial Vehicle Insurance Tips and Considerations
- If your business owns or leases a vehicle, make sure its name is listed on the policy as the principal insured.
- If you rely on personal auto or liability insurance to vehicles used for business, look closely at the provisions as business-related liability may be excluded.
- If employees operate a company car, make sure they have good driving records and are trained properly.
- Consider increasing insurance on your business vehicle to cover permanently attached items such as a generator or storage unit.
- Premiums are linked to the type of vehicle driven. If you’re buying or leasing a new car or truck, check the insurance rates before you make your final choice.
- Safety devices can help reduce premiums. If you’re buying or leasing a new vehicle, consider getting one with anti-lock brakes, side air bags, automatic seat belts and daytime running lights.
- Adding anti-theft devices such as alarms, and global positioning systems (GPS) that help police locate your vehicle if stolen also may reduce premiums.
- If you have access to an indoor garage or locked parking lot, places that decrease the likelihood of theft, you may qualify for lower premiums.
- The region in which your business operates affects premiums. For example, insurers in areas prone to extreme weather such as hail, wind storms and hurricanes, or high-traffic, high-theft locations typically charge higher rates.
- A high past-claims history can increase insurance costs, while choosing a plan with higher than average deductibles can lower premiums.
- If you use your personal vehicle to conduct business, you may want to consider a higher liability limit. Premiums likely will be higher, but having additional coverage to protect both business and personal assets will be beneficial in the event of a lawsuit because of an accident.
- Adding telematic devices to your vehicle(s) can communicate useful information about drivers, schedules, locations and deliveries.