When purchasing vehicles for your company, it’s crucial to have commercial auto insurance. Most states require it, and for good reason. Commercial auto insurance provides a multitude of coverages for the driver, the vehicle itself and other people on the road in case of an accident. But this insurance isn’t cheap, especially for companies with entire fleets or large carriers. There are many factors that go into the cost of your company’s commercial auto insurance policy, and the drivers you employ is one of them.
While the policy may be in your name, each driver allowed to drive the insured vehicles will be considered as part of your policy. So even if your driving record and credit score are squeaky clean, your employees’ may not be. Factors that influence your commercial car insurance rates include:
- Size and weight of vehicle
- Type of cargo
- Credit score
- Driving record
- Claims history
- Amount of coverage
Unfortunately, rates for commercial auto insurance only seem to be rising. Companies with a longer history of losses or insurance claims are likely to pay a high amount more than other businesses for commercial auto insurance. For the insurance company, each of these factors add up to how likely your company is to file an insurance claim. If you have drivers on the policy with bad driving records, the insurance company is likely to charge more since the drivers may file a claim due to their history.
How Much Is Commercial Auto Insurance?
On average, a commercial auto insurance policy may cost anywhere between $900-$1,200 per vehicle. This also depends on how much coverage you have. Generally, liability coverage comes in millions. You could pay as little as $750 for $1 million in liability with $500 deductibles for comprehensive and collision coverage. Then again, you could pay up to $1,200 per vehicle for the same coverage. Heavier vehicles and vehicles that carry hazardous materials will cost more to insure because of the unique risk these vehicles pose to other people. States generally require businesses with these kinds of vehicles to carry a higher amount of liability insurance, as well.
Saving Money on Commercial Auto Insurance
When considering all the factors that go into your commercial auto insurance rates, you can see that some factors are out of your control. You must have certain vehicles for your work, which can’t be avoided. Other factors, however, can be influenced by direct choices.
1. Conduct background checks on all drivers. This is important both for saving money and making sure that you’re putting drivers on the road that you can trust behind the wheel. When considering prospective hires, ask for a driving record.
2. Add protection to the vehicles such as anti-theft locks. Lowering the likelihood of filing a claim can save money on commercial auto insurance.
3. Ask about bundling. Some insurance companies have opportunities to bundle your commercial auto insurance policies.
4. Ask about discounts.
5. Avoid claims when possible. Sometimes, the cost of repairing damage is less than the cost of your deductible. In this case, it may be best to simply repair the damage out of pocket.
Although you can choose lower coverage to save on money, this should be done very carefully. You must have at least the minimum amount of liability and medical expense coverage that your state requires. These coverages typically don’t cover other incidents such as damage to the actual vehicle, theft or vandalism. Comprehensive and collision coverage is important to repair the work vehicles after an accident without digging into the company’s financial pocket.
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