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Commercial Auto Insurance

Updated: Oct 2, 2020

Getting a commercial auto insurance always comes in handy for your business vehicles at the end of the day. They can help you optimize your finances and the cost of maintaining your vehicles in the case of an accident.

However, there are several requirements put in place when it comes to getting an insurance policy for your commercial vehicles. The deductibles are quite different from the conventional personal car insurance and in this article I would be highlighting them.

Commercial auto insurance requirements

There are many insurance requirements and they differ across states. Here are some of factors that affect your commercial auto insurance requirements are:

1. Federal and state laws The amount of insurance you must have for a vehicle will be decided by either state or federal law. These laws typically determine the insurance requirements after considering the vehicle type, weight, and the number of passengers it carries.

2. Type of materials a vehicle carries The requirements for vehicles carrying cargo, people, or hazardous materials differ. Several factors have to change when the type of content is considered. For hazardous contents, new considerations have to be put in places such as the car's ability to protect both road users and the personnel in the vehicle. Passenger carrying vehicles are also evaluated for certain features. Vehicles carrying only cargo usually have the most relaxed rules.

3. The nature of the vehicle By this, they are asking you if you bought the vehicle if it's a taxi, a rental, or a tow truck. Your insurance company can guide you to find the best insurance plan for you by answering this question.

As a small business, you don't have to worry about federal commercial auto insurance laws. With your company made up of small vehicles like Sedan and Picked up truck, the state insurance requirement will likely be personal auto insurance requirements.

Terms associated with commercial auto insurance and their meanings

Combine sign Limit

Some insurance liability minimums will be listed as one whole number, such as $600,000.

Bodily injury and property damage

If you see three numbers listed in this manner, "50/100/10" as an example they represent:

  • Bodily injury per person

  • Bodily injury per person

  • Property damage


This means gross vehicle weight and gross vehicle weight rating.

Does Commercial auto insurance have deductibles?

Yes, your commercial auto insurance does have a deductible. Due to the requirements we mentioned earlier, every commercial vehicle faces risks and rewards. However, you can treat the personal expenses you pay as a deductible. Your deductible is your cost loss and has nothing to do with the coverage limits.

What are the types of commercial auto insurance?

Liability insurance: most states require business drivers o carry this insurance above minimum levels. This insurance policy helps you pay for the losses your vehicle causes if it were your fault.

  • Collision insurance: this type of insurance pays for the damages your vehicle causes in a wreck or collision.

  • Comprehensive insurance covers your vehicles should fire, theft, weather, or any act of vandalism befall it. This policy pays for the damages and, in extreme cases, replaces the vehicle.

  • Uninsured/ underinsured coverage: if your vehicle gets damaged by another uninsured or underinsured driver, this policy pays for your repair even if it wasn't your fault.

Having a commercial insurance policy for your business can not only prevent you from incurring losses, but it can also show your employees and board members that you can avoid unnecessary risks. Finally, this is a way to protect your business and your drivers and other car users on the road.

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