Purchasing commercial auto insurance may be one of the most important insurance decisions that a business owner makes. Anyone who purchases or uses a vehicle for business use, be it a singular vehicle or multiple vehicles, will have to purchase commercial vehicle insurance. To get the best coverage at the best rate, you should ask yourself a number of key questions before you meet with your insurance broker.
Here are some of the most vital questions you need to ask yourself and the reasons why they are so relevant:
Do You Know What Defines Commercial Vehicle Usage?
Although you may use a vehicle infrequently for commercial purposes, your personal auto coverage invariably excludes using a vehicle for commercial purposes. Also, each policy clearly defines what is meant by commercial use, so you need to be very clear on the differences so you do not end up having a claim denied.
How Many Total Drivers and Vehicles Does the Company Require?
Insurers who provide commercial auto insurance may distinguish the available coverage options depending on both the number of drivers and the number of vehicles. Multiple vehicles and drivers may best be served by fleet insurance. Different insurers will vary in how they base their rates and will do so based not only upon the number of vehicles insured but also the class of the vehicles involved. The best insurance option may be to consider purchasing fleet insurance as opposed to having the vehicles insured individually. It all depends on your needs.
What Strategies Can You Use to Reduce Your Commercial Vehicle Premium?
There are a number of other questions and measures that can help lower your premiums for either individual vehicle usage or fleet use.
Do You Know Your Drivers’ Records?
Drivers with multiple claim records or violations are clearly going to cause your premium rates to increase. Ensure that you are aware of the driving records of any new or current employees who will be driving the vehicles. Have all employees who drive report any and all accidents or driving infractions immediately. Make it company policy.
What Kind of Car Are You Buying or Leasing?
Although it might seem like a good idea to have the luxury or sports car to make a statement, just remember that you are going to pay for such vehicles. You may want to get a great looking mid-sized sedan that has a superior safety rating because an insurer is most definitely going to factor in the types of vehicles driven.
What Anti-Theft and Safety Devices Will the Vehicle(s) Have?
Vehicle theft is still a major concern, especially in urban settings. When insuring your vehicle(s), an insurer is going to consider several things:
· The location of your business, because not all parts of an urban setting are necessarily treated the same. High crime areas will most often lead to higher premiums.
· Whether or not alarms or GPS devices are installed in the vehicle(s).
· What the vehicle has for air bags and other safety devices such as beepers, sensors, or cameras.
What Kind of Deductible Can You Afford?
The amount of deductible you are willing to absorb can also have a dramatic impact on your premium because all insurers pretty much adhere to a simple formula: The higher the deductible – the lower the premium.
Will Federal or State Laws Impact Your Coverage?
Certain vehicles and what they transport can also be affected by federal laws and, in some instances, can be state-specific. Check out any legislative requirements which impact what you need to do beforehand.