Commercial auto insurance is crucial for businesses that rely on vehicles for their daily operations. Whether a business has a single van or fleet, the right coverage helps to protect against accidents, property damage, and liability claims.
Many businesses make mistakes when managing their commercial auto insurance policies, which can result in financial risks and coverage gaps. This article comes with common mistakes associated with commercial auto insurance that must be avoided.
Use Personal Auto Insurance for Business Vehicles
Most of the business, especially small businesses, assume that their personal auto insurance covers business-related driving. While personal policies often exclude commercial use, this leads unprotected business vehicles to cause accidents.
A commercial auto insurance policy provides complete protection for business-related travel and transportation of products or employees.
Focusing on Price instead of Quality
Each insurer has a different premium amount. Most businesses focus on cost rather than quality, whereas cost value would be your priority for decision-making when choosing a commercial auto insurance policy.
The cheapest policy might not provide you with coverage, but it can result in losses later. Check the coverage policy before taking the final decision. To choose the best option, try to compare policies from different insurance companies.
Cutting Back On Liability Insurance
Auto accidents result in costly damages and very expensive lawsuits. If the liability policy offers only a minimum amount, then you have to pay the rest of the amount on your own.
The broker you hire must know your company’s risk and requirements, so choose the most suitable liability coverage.
Overlooking Hired and Non-Owned Vehicle Coverage
Companies that rent their vehicles or need employees to use their vehicles for their work, but they don’t realize they require more protection. The commercial auto insurance policy does not add accidents involving owned or rented vehicles.
So companies should add a hired or non-owned vehicle to get protection against liability claims.
Ignoring State and Industry Requirements
Every state has its own commercial auto insurance requirements. And some industries also have some additional coverage regulations; if these rules are not followed, it results in fines, license suspensions, or uncovered claims.
So when buying an auto insurance policy, review the state and industry-related policy regulations to ensure compliance and proper protection.
Not Listing All Business Vehicles and Drivers
Some business mistakes are that not including company-owned vehicles or employee vehicles that are used for business purposes can result in claim denials.
To avoid these mistakes, you should even add occasional drivers to ensure they are also covered in case of accidents. Make sure to update the record of employees or vehicle changes to help in complete protection.
Choosing A Low Deductible at Any Cost
Choosing a low deductible means paying a high premium and other problems. To avoid these mistakes, you should understand the everyday operation risks for your commercial vehicle. After understanding them, decide which deductible will align with your needs. An insurance agent can guide you better in making the most suitable decision.