Explaining Commercial Auto Insurance

If you're a business owner or manager, you're always busy. From scheduling your employees to satisfying your customers, you work hard to help make sure your business is a success. Depending on the type of work you do, a commercial auto insurance policy could help you safeguard the business you've worked so hard to build.

What is commercial auto insurance?

Similar to how a personal auto insurance policy protects you from financial loss in the event of an automobile accident, a commercial auto insurance policy helps protect your business in the event of an automobile accident that involves one of your business cars, trucks, or fleet vehicles.

While commercial auto insurance policies share some similarities with personal auto insurance policies, there are also key differences in the two when it comes to coverage, exclusions, definitions, and limits. Talk to your insurance agent and learn more about the differences between personal and commercial auto insurance before assuming that you have the coverage you need.

Who qualifies for commercial auto insurance?

If you use your vehicle or truck to do activities related to your job or business (other than commuting), you may need and qualify for a commercial auto insurance policy.

Can you answer “yes” to any of the following? If so, you could be eligible for a commercial auto policy.

  • Do you use your vehicle to transport goods or people for a fee?
  • Do you use your vehicle to conduct a service?
  • Do you haul (or tow a trailer hauling) a significant number of tools or equipment that you use to conduct your business?
  • Do your employees drive company-owned, leased, or rented vehicles?
  • Are any of your vehicles registered or titled in the name of your business?

What kinds of vehicles are typically covered?

Depending on how they're used, many kinds of vehicles could be covered by a commercial auto insurance policy. Types of vehicles may include:

  • vehicles used for food service, like food trucks and catering vans;
  • vehicles used by plumbers, roofers, electricians, and landscapers;
  • courtesy vehicles for repair shops, hotels, and restaurants;
  • delivery vehicles for flowers, pizza, food, furniture, or other goods;
  • funeral home vehicles like limousines, hearses, or escort vehicles;
  • farming vehicles like pickup trucks, livestock trucks, or dump trucks.

How long does coverage last?

Commercial auto insurance policies typically have terms of 6 or 12 months, the same as private passenger auto insurance policies; however, individual policy terms and coverage may vary depending on the insurance company. Direct Auto Insurance offers competitive prices on policies with terms of 6 and 12 months.

What does commercial auto insurance cover?

Just as many states require you to keep a minimum amount of auto insurance coverage on your personal vehicles, many require a minimum amount of auto insurance coverage on commercial vehicles. Direct Auto offers the following coverage options:

  • Bodily Injury & Property Damage Liability:
    This will pay damages up to your policy limits that your business is legally obligated to pay because of bodily injury or property damage caused by a vehicle covered under your commercial auto insurance policy.

  • Uninsured Motorist & Underinsured Motorist (Bodily Injury):
    Coverage that helps pay for medical and related expenses incurred by an insured driver under your policy caused by a car accident in which the at-fault driver does not have liability insurance, cannot be identified, or has an insufficient amount of insurance coverage to pay for your claim. It pays up to the limit of coverage you have chosen for your car. This coverage is mandatory in some states. In some states, there may also be uninsured motorist coverage for property damage to your vehicle.

  • Medical Payments Insurance:
    An optional coverage could help pay for medical, hospital, or funeral expenses incurred by an insured driver and/or passengers in a vehicle covered on your policy, regardless of who is at fault.

  • Hired Auto & Employer's Non-Ownership Liability:
    Coverage that can provide liability protection when the vehicle is not owned or registered to the business (like when an employee drives their own car for business purposes) or for when you're driving a hired, leased, rented, or borrowed vehicle.

  • Collision Insurance:
    Coverage that will help pay for your vehicle to be repaired or replaced if your vehicle hits another object, overturns in an accident, or is hit by a “hit and run” driver. There may be a deductible with this coverage.

  • Comprehensive Insurance:
    Also called “other than collision,” is coverage that will help pay for your vehicle to be repaired or replaced if your vehicle is damaged by something other than a collision, like if it's stolen, vandalized, or damaged in a natural disaster. There may be a deductible with this coverage.

  • Fire & Theft with Combined Additional Coverage (FTCAC):
    Similar to comprehensive coverage, this coverage helps pay for your vehicle (typically larger trucks) to be repaired or replaced in the event that it is damaged as a result of a specifically named peril.

Still unsure whether you need or qualify for an affordable commercial auto insurance policy or if a commercial policy is right for you? Our knowledgeable agents are ready to help! Simply call us at 1-877-GO-DIRECT (1-877-463-4732).

*Commercial auto insurance produced by Right Choice Insurance Agency, Inc. and Direct General Insurance Agency, Inc. d/b/a Direct Auto Insurance as agents for Titan Indemnity Company, a Nationwide Insurance Company & its affiliates. Not available in all stores. Pay plans, discounts and coverages subject to terms and conditions.