What is commercial auto coverage and who is it for?
Commercial auto coverage is a type of insurance designed to help protect you and your vehicles in case of an accident while on the job. Your personal auto insurance typically doesn’t extend to company vehicles, so commercial auto coverage can help protect you and your business from the unexpected.
Commercial auto insurance covers a range of vehicles, including cars, trucks, vans, and specialty vehicles used for business purposes and is essential for businesses that rely on transportation for their operations, such as delivery services, contractors, and companies with fleets. Whether you own a single company car or an entire fleet, commercial auto coverage is a must if your business relies on vehicles to get things done.
What's covered by a commercial auto insurance policy?
If you have commercial auto insurance for your business, you’ll be protected from the financial burdens that come from accidents, like vehicle repairs and medical bills. Remember, a covered claim will be subject to your policy's deductibles and limits. Additionally, coverage availability and requirements vary by state.
Here are some common commercial auto insurance coverages to help you get started:
Allstate offers two liability insurance components in a commercial auto policy: bodily injury liability and property damage liability coverage. Almost every state requires auto liability coverage.
Let’s say your employee is driving a company vehicle and causes an accident. Bodily injury coverage helps pay for the other driver's medical bills, and property damage coverage helps pay for their car repairs.
Collision coverage helps pay to repair your company vehicle or may help pay to replace it if it's a total loss, after a covered accident.
Comprehensive coverage helps pay for your business vehicle repairs if it’s damaged in a non-collision-related event, like theft, fire, vandalism or hail. For example, if a storm rolls through and hail damages your company car, comprehensive coverage may help pay for repairs.
Uninsured/underinsured motorist coverage
If one of your employees is in an accident and an uninsured or underinsured driver is at fault, this coverage helps pay for your employee's medical bills.
Rental car coverage
If your company vehicle needs to spend some time in the shop after an accident, rental car coverage helps keep your business running with a rental vehicle.
What's not covered
Not everything is covered by a standard commercial auto insurance policy. While coverages vary based on where you live, the following expenses and scenarios are typically excluded or require additional coverage options be added to your policy:
- Medical expenses that are unrelated to an accident when an employee is driving a company vehicle.
- The contents inside your business vehicle.
- Accidents that happen when an employee drives a personal vehicle for business reasons.
- Repairs to a rental vehicle you're driving while waiting for your company car to be fixed after an accident.
Do I need commercial auto insurance?
It depends on the business you’re in. Here are a few of the professions that may benefit from commercial auto insurance:
- Artisan / specialty contractors
- Doctors and Dentists
- And more
What is the risk if I don’t have commercial auto insurance?
If you don’t have commercial auto insurance for your business, you may be vulnerable to financial risk when accidents happen. That’s because typically, a personal auto policy doesn’t cover your business vehicles. Here are a few of the risks you and your business may face without commercial auto insurance:
- No liability coverage
- No coverage for any vehicle repairs
- No coverage for legal expenses
- No comprehensive coverage for unrelated damages such as theft, vandalism or hail
Why you should use Allstate for your commercial auto insurance policy
When you purchase a commercial auto insurance policy from Allstate, you’ll be treated with the respect you and your business deserve. A.M. Best. has given Allstate an A+ rating for superior 24/7/365 claims service.
How much does commercial auto insurance cost?
There are a few factors that determine the amount of your commercial auto insurance policy. These include the types of business, types of vehicles, how they are used, the coverages you choose, your coverage limits (the maximum amount of money insurance will pay for a covered claim) and your deductible (the amount you pay out-of-pocket for a covered claim).
What type of vehicles are covered by commercial auto insurance?
Not all company vehicles are the same. Here are some of the most common types of business vehicles covered by commercial auto insurance:
- Cars & SUVs
Commercial autos and SUVs are frequently used for businesses that require transportation for employees, clients, equipment or small deliveries.
Ideal for delivery services, contractors, florists, or any business requiring the transportation of goods and larger equipment.
- Pickup trucks
Commonly used by construction workers, landscapers, and businesses involved in hauling materials or goods that may not fit inside an enclosed space.
- Box trucks
Widely used for freight transport, moving services, and by businesses that require a protected and weatherproof space for transporting goods.
- Service utility trucks
Often utilized by maintenance crews, electricians, plumbers, and other service-oriented businesses needing a mobile workspace and storage for tools and equipment.
Reading your policy declarations
When you purchase Allstate commercial auto insurance, you'll receive policy declarations. This document "declares" the choices you've made for your insurance policy, specific to your commercial auto coverage. Your policy declarations specify things like your deductibles and limits, as well as optional protection you may have purchased.
Take time to read through your policy declarations and reach out if you have any questions. Understanding your policy and what is and isn't covered is key to knowing what to expect in case you ever need to file a claim.
Commercial auto insurance FAQs
Traditional commercial auto insurance policies do not typically cover rideshare drivers because ridesharing falls into a unique category of transportation that combines elements of personal and commercial vehicle use. When a driver is using their vehicle for ridesharing purposes, they are often required to have a specific type of insurance known as rideshare insurance or transportation network company (TNC) insurance.
Commercial auto insurance typically covers the vehicle itself rather than the tools or equipment inside it. The coverage is generally focused on protecting the vehicle and liability associated with its use, such as bodily injury or property damage resulting from an accident.
For coverage of your work tools, you would typically need to look into other types of insurance, such as a business owner's policy (BOP) that may offer coverage for business property, including your tools and equipment. If your tools are essential to your business operations, it's advisable to ensure that they are adequately covered to protect against losses such as theft, damage, or loss during transportation.
Commercial auto insurance is generally more expensive as it provides coverage tailored to the unique risks associated with your business vehicle use. Several factors contribute to this difference in cost include higher liability limits, type of vehicle, usage patterns, number of drivers, the nature of the business and the cargo that is being transported.