MONDAY, FEBRUARY 22, 2021
Owning a vehicle (or fleet of vehicles) for your business means that you have to invest in quality, customized commercial auto insurance. Some business owners think that this coverage is an unnecessary expense that only drags down their net profitability. In reality, it’s a crucial part of your commercial insurance portfolio if you plan to use vehicles or employee drivers in any way. It’s there to protect drivers, vehicles and many others in case of unexpected or unavoidable problems involving their vehicles or drivers.
All the same, commercial auto insurance is going to have to be a standard part of your overhead costs. Many factors can influence your policy premiums, and one of these is drivers that you intend to hire for operating purposes. While it is possible to insure multiple drivers under a commercial auto policy, you must do so with care and forethought. Let’s take a closer look at how to do so.
How to Insure Employee Drivers Under Commercial Auto Insurance
A commercial auto insurance policy will cover the business as the primary insured party. After all, when something happens to a company-owned vehicle, then it is the business itself that will have to suffer the consequences, be they repair bills, injury costs or accident lawsuits.
However, while the policy might belong to the business, each driver that uses the insured vehicles will be considered insured under the policy. This is good for your business on one hand because it allows you to comprehensively insure everyone who might be using one of your vehicles at any given time.
Still, this practice has its drawbacks. Even if your driving record and credit score are squeaky clean, your employees’ may not be. It’s at this point that you might be more prone to seeing your commercial auto insurance rates increase.
Factors that influence your commercial car insurance rates include:
And, importantly, the driving records of those who operate the vehicles also factor into your policy’s rates. After all, drivers with tarnished records are more likely to have accidents in the future. Additionally, companies with a longer history of losses or insurance claims are likely to pay more than other businesses for commercial auto insurance. Therefore, if you have a driver on your commercial auto policy who has a tarnished record, you are putting yourself on the line for added cost risks that could drive up your rates.
For the insurance company, each of these factors add up to how likely your company is to file an insurance claim. If you have drivers on the policy with bad driving records, the insurance company is likely to charge more since the drivers may file a claim due to their history.
What Will Commercial Auto Insurance Cost?
All commercial auto insurance policies vary in price. A ballpark estimate provided by HowMuch.Net places the average price between $900 and $1,200 per year. Again, however, based on many factors, including the amount of coverage you buy, your precise premiums will vary. You must buy at least the coverage that is required of you by law, and in forty-nine states, commercial auto insurance is mandatory.
Heavier vehicles and vehicles that carry hazardous materials will cost more to insure because of the unique risk these vehicles pose to other people. States generally require businesses with these kinds of vehicles to carry a higher amount of liability insurance, as well.
How Can I Save On My Rates?
Though, of course, some factors that influence your commercial auto insurance costs are beyond your control, there are many other practical ways that you can work positively influence your rates.
Consider the following when working to keep your rates favorable:
1. Conduct background checks on all drivers. This is important both for saving money and making sure that you’re putting drivers on the road that you can trust behind the wheel. When considering prospective hires, ask for a driving record. Periodically re-check these records to see if a driver has received any significant driving charges.
2. Add protection to the vehicles such as anti-theft locks. Lowering the likelihood of filing a claim can save money on commercial auto insurance.
3. Ask about bundling. Some insurance companies have opportunities to bundle your commercial auto insurance policy with other insurance benefits.
4. Ask about discounts. Most commercial auto policies come with many of the same discounts as private policies.
5. Avoid claims when possible. Sometimes, the cost of repairing damage is less than the cost of your deductible. In this case, it may be best to simply repair the damage out of pocket.
While you can choose lower amounts of coverage in order to reduce your rates, you should only do so on the advice of your insurance agent. You must carry all coverage that is legally required of you, but you are highly encouraged to purchase more substantial coverage and optional benefits. The more coverage you have, the better your company will be able to withstand the ramifications of vehicle accidents and countless other hazards. =
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