Questions and Answers About Commercial Auto Insurance

If your business routinely delivers people, documents, food, property, or other payloads in the course of your services, then you most likely need to invest in commercial auto insurance. This type of insurance differs somewhat from personal auto insurance in its coverage, requirements, and costs, much to first-time purchasers' confusion.

Once you understand some key points about commercial auto insurance, from what and whom it covers to how much you might expect to pay for it, the more effectively you can shop for a policy that suits your particular business. The following questions and answers should put you on the right road.

Who Needs Commercial Auto Insurance?

Businesses that operate food trucks, delivery or construction vans, company cars, shuttle buses, taxis, and other such work vehicles all need to maintain commercial auto insurance. If your work involves 18-wheelers or similarly oversized vehicles, you might need truck insurance instead of commercial auto insurance.

While personal auto insurance covers an individual owner or driver against accident-related losses and other damages, commercial auto insurance protects businesses against the same kinds of losses. If you or your team members drive a car owned or leased by your business, you need commercial auto insurance.

What Does Commercial Auto Insurance Cover?

Commercial auto insurance can provide many of the same types of coverage as personal auto insurance. A typical policy might include bodily injury liability, property damage liability, and uninsured or underinsured motorist coverage. A well-rounded policy also includes collision and comprehensive coverage.

Your commercial auto insurance policy may also protect you in ways that an ordinary personal auto policy might not. Examples include medical payment coverage, which pays for medical and funeral expenses regardless of liability, and combined single limit coverage for both property damage and personal injury claims.

Your insurance agent may recommend that you enhance your commercial auto coverage with certain extra options to maximize your business's financial protection. These options might include an umbrella policy, new vehicle replacement coverage for totaled vehicles, or gap insurance on vehicles you still owe payments on.

How Much Coverage Does Illinois Law Require?

The State of Illinois requires all owners of both personal and commercial vehicles to carry liability insurance at the very least. Your commercial auto insurance policy must provide at least $25,000 in individual bodily injury coverage, up to $50,000 for multiple injured individuals, and $20,000 in property damage liability.

Other Illinois commercial auto insurance requirements may depend on what type of vehicles you use and how you use them. For instance, a vehicle that carries 10 passengers must carry $1 million in bodily injury liability, while one that carries over 30 passengers must carry at least $3 million.

Commercial vehicles that carry property instead of people must obey the state's combined single limit coverage requirements. Your mandatory CSL coverage minimums can vary according to the vehicle's purpose and cargo. A tow truck may need only $500,000 in CSL coverage, while a hazardous substance carrier may require millions.

What Factors Affect Commercial Auto Insurance Rates?

On average, businesses pay commercial auto insurance premiums of $147 per month. However, the actual rates can vary widely depending on what kinds of vehicles you have, the size of your business and its vehicle fleet, the number of drivers in your organization, your coverage limits, and the size of your deductible.

Driver behavior and vehicle usage also factor into how much you'll pay for your commercial auto insurance. If your business has a history of multiple past claims, for instance, or if your drivers have a history of accidents, you may pay more. You'll also pay more for vehicles that spend many hours per day in high-risk traffic areas.

How Can You Reduce Your Premiums?

While you never want to carry insufficient levels of commercial auto insurance, you can get the most insurance for your money by going over the various coverage options carefully with your insurance advisor. You may find that you can safely do that without certain conveniences such as temporary car rentals that might inflate the premiums.

Because your employees' driving records will affect what you pay, screen those driving records carefully before hiring new employees or allowing those employees to drive your vehicles. Careful drivers may help you avoid filing claims, so choose a policy that allows for a no-claims annual discount.

The payment options you select could also help you reduce your commercial auto insurance costs. Many insurance companies offer lower rates for clients who pay with electronic funds transfer or who pay a whole year of premiums in one lump sum. If you can afford it, a higher deductible will most likely lower your premium amounts.

When you consider how much your business means to you, you can readily see the importance of adequate commercial auto insurance. Illinois Insurance Center's experienced advisors can discuss your needs with you, helping you pick out coverage that provides both protection and peace of mind. Contact us today.