How to Choose Between Different Types of Commercial Auto Insurance

Recommend Article Article Comments As a business owner in any industry, protecting yourself and your business with the correct form of insurance is always crucially important. You must do everything that you can to guard against unforeseen circumstances before they occur, so they are unfortunate but never disastrous or ruinous for your company. Additionally, having the correct form of insurance may also be a requirement for your industry or profession.

When it comes to commercial auto insurance, how exactly can you find the right type of coverage? As always, this boils down to what your business does, including the goods you may be transporting or the services you may be providing, how your business does it, and what type of vehicle your business utilizes to fulfill that objective.

Along those lines, there are several broad classifications which will provide a good starting point. For example, one of the more common types of commercial auto insurance is owner operator insurance, sometimes abbreviated as OOIDA. This is specifically designed for individuals who are owner operators in the trucking industry, and provide for-hire transport services.

Many businesses utilize a regular car for simple purposes and end up needing commercial auto insurance in addition to personal auto coverage. For example, a realtor may drive clients from the office to various houses around town. Commercial auto insurance is needed here. Or perhaps you make deliveries of food or other goods. You need commercial auto here, too.

You might also be utilizing a business van for local deliveries of flowers, packages or newspapers, or anything else, or perhaps you give customers rides to and from your location in a van. Once again, you need commercial auto here too, although there are special policies specifically designed for company vans.

Another classification is commercial auto insurance for the construction and contracting industry. Whether you’re the project manager and you simply are driving your car to the job-site, or you’re hauling materials and equipment utilizing a van, truck, pickup, flatbed truck, or anything else, this is another specific type of coverage which is available.

There is also specialty business vehicle insurance. Specialty vehicles are those which don’t fit easily into other broad categories, such as semi-trucks, 18 wheelers, pickup trucks or vans. Here, you’ll find refrigerated trucks, log haulers, automobile haulers, tow trucks, wreckers, dump trucks, garbage trucks and waste haulers, and more. These all apply very specifically to certain types of vehicles, and in turn, certain types of businesses and services.

Of course, the list goes on from here. The most important thing you always have to do is find as specific a policy and coverage as possible. The good news is, there’s an absolutely massive range of different coverage types and plans, so that’s almost always fairly easily accomplished.

What Are Basics in Auto Insurance Policies?

Selection of an auto insurance policy that covers all the needs of yourself and other family members is very important. You should know the basics of auto insurance to choose the right policy with adequate coverages.

Auto Insurance

Auto insurance is a protection if you are the cause of injuries to others in an auto accident or you damage the property of others. The auto insurance also offers protection of there is a theft of your car or the car gets damaged in an accident. You would have to pay a fixed amount every month for the auto insurance coverage, which is termed as premium or deductible by the insurance companies. The terms of the car insurance policy would decide which aspects the insurance company would cover or would not cover.

What are Standard Auto Insurance Coverages?

Each state in the United States of America has its own minimum limits on car insurance coverage. You have to find out the law of your state to obtain the correct minimum coverages. For example, in the state of Idaho, the minimum coverage is $25,000 for injury or death of one person, $50,000 for injury or death to more than a single person, and $15,000 for property damage. These three coverage limits are compulsory in Idaho for all drivers when they buy a car insurance policy. You should carry the proof of having a valid car insurance whenever you drive. If the authorities are not able to obtain proof of insurance when you are driving, the fine for first offense would be $75. Subsequent convictions could result in fine up to $1,000 and/or prison sentence.

Other Types of Car Insurance Coverages

Apart from the above basic minimum coverage limits, it is advisable to have a few other coverages also for complete protection of yourself, your family members, and your vehicle, if an accident occurs. The most common coverages are collision coverage, comprehensive coverage, medical payments coverage, and uninsured or underinsured motorist injury coverage.

Collision coverage would offer protection for the damage to your vehicle if you hit another car or object. Comprehensive coverage would pay for damages to your car by causes like fire, hurricanes, vandalism, and theft of your car. Medical payments coverage would provide cover to you, your family members, and the passengers in your car, if an auto accident occurs. You could receive reimbursement of medical expenses incurred for injuries due to that accident. You would receive coverage for medical treatment even if you get hit by another vehicle as a pedestrian

Auto Insurance Renewal

Throughout the period, policyholders’ activities on the road and behind the wheel are always under their insurance companies’ radar. With big helps from police officers and local DMV, insurers know whether or not it is necessary to make some changes to the policy. Changes are not always bad; drivers who have demonstrated safe practices and followed insurer’s guidelines can lower their rates or become eligible for discounts to reduce the premium even further.

The countdown for renewal date starts as soon as the policy takes effect. In terms of renewal period, auto insurance policies are available in two choices:

· Annual Policy: an auto insurance policy that is valid for one year.

· Semi-annual Policy: some policies are valid for only 6-moths period. For policyholders, 6-months provide the chance to improve DMV records and reduce the premium for the next renewal date.

Auto insurance companies have the obligation to notice policyholder about renewal information. They can send it via mail or email within 45 – 30 days in advance of renewal date. Unless policyholders want to make changes to the current policy, renewal process should be quick and easy. Nonetheless, it is best for policyholders to do their due diligence and check for errors or unexpected surcharge. Before the renewal takes place, please make time to:

· Review the policy: the best time to verify discounts or make changes to coverage is on renewal date. It becomes more important when policyholders have practiced safety guidelines from the insurer as a requirement for discount eligibility. Auto insurers often reward good customers with lower premium as well. In many cases, it takes an insurance agent to see potential changes in the policy.

· Make payment: whether policyholders want to continue or cancel the policy, the best time to notify the insurer is on renewal date (or several weeks before). Some carriers do not allow for grace period on renewals, so they can cancel the policies because there is no payment confirmation. Even when policyholders want to switch to new carrier, it is important to notify the current insurer to avoid fines.

Premium Surcharge

An increase in premium rate is not uncommon. It happens for two main reasons. First, the insurance company increases the base rate. In this case, all policyholders should get premium surcharge. Even good drivers with clean records should pay more under this circumstance. Another reason is that the policyholder has higher risk than before in the previous period. Traffic tickets and bad credit score can lead to premium surcharge. Auto insurance claims for an at-fault accident almost always increase the premium as well.

Changes before Renewal

Insurers allow policyholders to make changes in the policies between renewals; this regulation applies only for auto/car insurance policy. Other vehicles such as RV, boat, and motorcycles may not have this option. Changes in policy for examples coverage omission or vehicle removal from the list can offset the premium surcharge from bad DMV records. In worst scenario where policyholders have records of involvement in accidents that cause severe injuries or deaths, the rate can go very high beyond affordability. To compensate for expensive premium, policyholders can choose to purchase only state’s minimum coverage requirements.

Odd Surcharge

There are times when auto insurance companies add small amount of money to the bill. It is normal for semi-annual policy with which insurer adds renewal fee. Late payment is also punishable by small fines (from 5 to 15 dollars). Late fee is one time fine, which means it will disappear as policyholder pays on time the next month. Anytime there is odd surcharge without information, it is good idea to ask helps from insurance agents. The additional fee is possibly a mistake to waive.

Auto insurance policy is not a one-time purchase effective for lifetime; all are subject to changes and renewals. The idea is to give the chance for good drivers to get lower premium and punish bad driver with premium surcharge. Cancellation is also common because the policyholders have DUI or felony convictions.

I Do Not Really Like The Quote Of My Auto Insurance Claim Adjuster, What To Do?

If you have an accident and need to make a claim for your auto insurance, then consulting with your auto insurance claim adjuster would be a very important process. Actually, the duty of an auto insurance claim adjuster is to evaluate the validity and value of your claim as well as the payment that will be made in the future. In most of the cases, they will make a detailed assessment on your auto repair. They will check the automotive repair shop list which they always use for this kind of work and they will then ask them for a quote of the auto repair cost. At last, they will offer you the quote.

In fact, there are quite many factors which will affect the amount that they pay you. One of them is the deductibles which you may have on your auto insurance. If you try to take out your auto insurance, one of the ways that many people would like to keep their cost low is by allowing more deductibles so that the insurance company will only pay you the claim that exceeds a set amount. It means the higher the amount you are willing to accept, the cheaper your auto insurance will be. Hence, this can limit the the payout amount of the companies and you can also get the cheaper auto insurance too.

Apart from that, it is very important to know that you may not get the best offer when you try to make a claim from your auto insurance claim adjuster at the first time. If you think the offer they give you is much lower than you expect, you can also get the quotes from other auto repair shops for a comparison purpose as most of the auto companies are likely to pay you less than they need to.

Therefore, when you are not satisfied with their quotes and plan to ask for more, remember to have enough information such that you can show them all of the relevant information that you have and why they should pay you more. In most of the situation, it will end up as a compromise between the both of you. Hence, in case you receive a report from your auto insurance claim adjuster, unless you are really happy with it, or you can always get your own quotes as it can save you lots of money.

Even If You Want The Minimum Amount Of Auto Insurance, Liability Auto Insurance May Not Be Enough

If you want to have the absolute minimum auto insurance you can, then in most states you will be required to hold liability auto insurance. This type of auto insurance doesn’t really help you at all if you cause an accident, but it’s great for the other driver involved. This type of insurance is generally the cheapest sort you can get.

Basically, liability auto insurance doesn’t cover your own vehicle at all if you cause an accident. If your vehicle is damaged or destroyed, you won’t receive any assistance from your insurance company to repair or replace your car. However if you damage someone else’s vehicle, they will still be covered. Their medical expenses will also be covered up to the limit of coverage you have.

Holding liability auto insurance is definitely risky. If you wreck your car in an accident, then you’re either going to have do with a vehicle or else you will need to find the money to buy another one. If, however, your car is old and not worth much, that may not bother you too much. Certainly if you could find the money to buy another car, it may be worth just holding liability auto insurance so that your insurance premiums are lower. If you’re leasing or paying for your vehicle through a finance company, you will probably find that liability auto insurance isn’t sufficient. Most of the time they will require you to have a higher level of coverage, such as comprehensive insurance and collision coverage.

The good thing about this insurance is that you’re protected no matter what sort of car you run into. So your $2,000 car might not matter too much, but that $200,000 sports car you run into could make a serious dent in your financial situation without liability auto insurance. Even so, it’s important to make sure your medical expenses are covered even if you’re at fault. If you already have personal health insurance you may be covered, so it doesn’t matter if medical expenses aren’t covered under your auto insurance.

Remember, too, that if an uninsured driver hits your car, you won’t have any insurance coverage to pay for the repairs. It’s easy to think that because you’ve driven for 10 years with no accidents that your run of good fortune will continue, but the whole point of insurance is to think about the worst-case scenario. If you’ve done that, and liability auto insurance is still the best choice, then shop around online for the best price.