When owning or running a business, having the right auto insurance is a must. When you’re shopping for car insurance for your business, be sure to do your research to guarantee you have the right coverage for every vehicle in your fleet. Business car insurance differs from personal insurance policies in that it covers the commercial use of vehicles. Understanding what business insurance is, knowing how much it costs, and getting a quote will make running your business just that much easier.
What Is Business Car Insurance?
A business’s car insurance is referred to as a “Business Automobile Policy” or “BAP” and can also be called a “Business Auto Coverage Form.” This type of policy provides coverage for vehicles used in company affairs. According to Investopedia, trucks, vans, or cars that the company owns or leases, as well as employee-owned vehicles that are being used for work purposes, are all covered under a BAP. Business car insurance covers you when using your car for work, including going to different offices or traveling across the country for your job ; however, it does not include regular commuting to a single location.
What Types of Coverage Can I Get With a Business Automobile Policy?
Your BAP should include property damage and liability coverage. If you are leasing or making regular payments on the vehicle, different coverage types may be required.
Collision: Collision coverage often can only be used in combination with comprehensive and liability coverages. Collision compensates the insured for damage to the vehicle caused by a traffic accident or striking a static object, such as a fence or telephone pole. Collision won’t cover you for falling objects or theft. Collision with another motorist or with a building is covered under collision even if you’re at fault.
Comprehensive: Comprehensive coverage covers damage to the car from events out of the driver’s control. This includes damage from theft, vandalism, natural disasters like tornados, hurricanes, earthquakes, striking an animal in the road, and falling objects such as tree branches or hail.
Liability: Liability coverage compensates for injuries sustained by another person and damages to another’s property. If a driver for your company injures someone in a traffic accident and that person files a claim against the company, liability insurance will help pay for the claim. Most states require liability in their car insurance minimums. Liability insurance doesn’t have a required deductible, so you can choose your deductible based on your level of risk. In some states, your BAP liability coverage will not cover you if a driver is guilty of reckless driving or driving while impaired.
Do I Need Business Car Insurance?
If you use your car for business, not including your regular commute, you’ll need business insurance. These are some of the most common reasons you would need a BAP:
- Ownership or leasing: If a corporation or partnership owns or leases a vehicle
- High mileage for work: If you’re driving thousands of miles for work, including using your vehicle for ridesharing or delivery
- Vehicle weight or load capacity: If your vehicle weighs over 10,000 pounds or can carry a load over 2,000 pounds
- Regular travel to different locations: If you travel to many different locations often, such as out of state or to different cities, job sites, or offices
- Carpooling or shuttling: If it is part of your job to drive your co-workers or management to meetings, to and from the office, or to several different job sites
Even if none of these apply to you, you may still need business car insurance if you take regular trips to the post office, bank, or training courses for your work.
How Much Does Business Car Insurance Cost?
Because business car insurance policies have different coverage than individual policies, they are often more expensive. This is because you’re driving for longer and more frequently on unfamiliar roads, which increases risk factors. Here are some things that will influence your BAP’s cost:
- The driving records of employee drivers
- Policy deductible
- Policy limits
- The number of vehicles you employ
- The type of vehicle and its value
- Your level of risk
- Your insurance claims history
Business car insurance costs $142 per month at the midpoint. Almost half (44 percent) of Insureon customers with small businesses have policies cheaper than $125 per month.
What Is The Difference Between Personal and Business Car Insurance?
Business auto insurance policies are intended for commercial vehicles. These vehicles usually drive for longer and more often than personal vehicles. BAPs usually have higher limits because of the increased risk that comes with the increased frequency. Personal auto insurance covers claims associated with personal use only, like your commute and travel outside of work. Their limits are lower and typically cost less. If you are driving your car for work and are in an accident, your insurance provider could deny your claim if you don’t have a BAP. Sole proprietors who use a vehicle they own for work should have business car insurance even if they drive for personal use most often.
What Do I Need to Get a Quote?
Getting a quote is quick, and by having the necessary information ready, receiving an accurate quote can be even quicker. Here is some of what you will need:
- Estimated annual mileage
- The vehicle’s registration
- Occupation, job title, or employment status
- Any claims within the previous five years
- The details of any driver you wish to be on the policy, including driver’s license numbers
- The year, make, and model of the car or cars on the policy
These are the most common things you will need to supply your insurance provider with to receive a quote, but depending on the company, they may ask for more or different information. In either case, most information is relatively easy to obtain, and getting a quote online can take mere seconds.
Insuring your company vehicle has become one of the simplest and easiest ways to bring a business owner or employee driver peace of mind. Getting insured and on the road quickly and cheaply starts by heading online to get a quote today.
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