Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 16, 2020

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Key takeaways...

  • When choosing the best insurer, look for the one that recognizes gaps in existing coverage and offers solutions
  • Business auto insurance is underwritten in one of nine categories
  • Businesses located in crime-ridden areas are considered high risk to insure

Businesses have many unique needs that must be met by car insurance because of the wide variety of cars, trucks, and equipment that is used to complete tasks.

Employee activities create levels of risk that must be covered by riders on the auto insurance policy since they fall outside existing coverage under the worker’s compensation, health, or business insurance policies.

When choosing the best insurer, look for the one that recognizes gaps in existing coverage and offers solutions.

Gaps in business auto insurance coverage might be costly enough to devastate the very existence of the business. Make sure you are covered by comparing car insurance companies!

Enter your zip code above and start comparing car insurance companies for FREE!

Table of Contents

Reasons You Need Company Car Insurance

Businesses start out as small entities and certain assumptions are made about the auto insurance coverage.

Effective insurance agents and some accountants will apply some pressure to business owners to purchase adequate business auto insurance for the following very important reasons:

— Coverage Limitations – Personal car insurance policies will not cover vehicles or equipment owned under the business name. This fact is often discovered after a loss is sustained.

— Employee Coverage – Use of company vehicles by employees changes the risk evaluation from the insurance company. Business auto insurance will cover employee expenses if that person is injured in a company vehicle.

Health insurance coverage becomes secondary in this instance.

— Business Equipment – Specialty equipment that is required for completion of business tasks is covered when on a business vehicle regardless of location. Most equipment loss occurs off the business premises and complete company car insurance coverage will cover the loss.

— Stated Insured – Company equipment is owned under the company name and must be insured in the same manner. When a business entity uses leased vehicles, this detail must be covered to ensure payment of claims.

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Company Car Insurance Coverage Types

Business auto insurance is underwritten in one of nine categories, which are called symbols. Each different symbol designates the insured vehicles under the policy.

Descriptive titles have been assigned to each symbol. Insurance coverage must be written for specific instances and there is some overlap between the levels of coverage to prevent gaps.

Experience business auto insurers will conduct a detailed interview to determine the most appropriate coverage without issuing extraneous car insurance coverage. All information should be provided openly to reveal all uses of existing and the addition of new vehicles.

— Any Vehicle – Insurance companies strive to avoid writing an insurance policy under Symbol 1 because of the sweeping coverage that must be made available.

— Owned Vehicles Only Company vehicles owned specifically under the business name are insured under this policy symbol. Every vehicle must have a title with the company name to be covered under the policy.

— Owned Private Passenger Cars In some instances, insurance costs can be lowered by carrying two separate policies where one policy carries only the passenger cars owned by the business. All other vehicles would fall under another policy.

— Owned Vehicles (Not Private Passenger) Specialty trucks used for specific work-related tasks are covered under this symbol. This classification is more narrow and would not cover vehicles already under other symbols.

— Owned Vehicles (PIP Coverage) – Certain states will require that all business auto insurance is issued under this symbol. No-fault states require that protection against personal injury (PIP) is carried.

— Owned Vehicles (Uninsured Motorist) – In some states, this symbol is used to cover vehicles that fall into certain classes. Experienced insurers understand when it is prudent to write the policy under this symbol.

— Specified Vehicle Coverage – Since the VINs for each vehicle are listed in the policy, this is the most common option for the business auto insurance policy. Small businesses use this option to control the risk and lower the premiums.

— Hired Vehicle Coverage – Companies with a workforce that travels might carry this symbol on their insurance to cover rental cars used by employees.

Carrying this insurance reduces rental costs since rental car company insurance is not necessary.

— Non-Owned Auto Coverage – Some businesses will add coverage under this symbol to cover gaps left under the symbol 8 auto insurance. If employees use their personal vehicle for business reasons, that car is covered if something happens.

Company Car Insurance Premium Factors

Some factors can be changed to reduce the annual premium paid to cover company vehicles, but others must be accepted as part of doing business.

The cost of correcting the situation must be weighed against the premium paid. Compare car insurance companies to insure you are getting the best deal!

— Location – Businesses that are located in high-crime districts will be rated as a higher risk by each insurance company.

The annual premium will risk according to the perceived risk and claims history in the area.

— Driving records – Insurers do not simply assume that everyone is a good driver. Specific records are requested and actual driving records for each employee listed on the policy will impact the cost of company car insurance.

— Security Devices – Locked storage areas and garages are rewarded by lower premiums since the risk of loss is decreased.

— Coverage Limits – Setting insurance limits is extremely challenging because of the necessity to balance loss against cost. Carrying insufficient amounts of insurance is not a wise business decision.

— Liability Coverage – An umbrella liability policy can be more cost-effective than carrying liability on each insurance policy.

—Deductibles – All deductibles must be set with awareness of the possibility of multiple concurrent losses.

Final Evaluation

Car insurance companies are very adept at providing sufficient coverage and working with the business owner to keep the business car insurance coverage updated.

Wise business owners ask a lot of questions and utilize their most detail-oriented employee to chase the business auto insurance details.

Every business owner should conduct a proper car insurance comparison to insure their business is saving the most money possible!

Find affordable commercial auto insurance now! Enter your zip code below to get started for FREE!

References:

  1. https://en.wikipedia.org/wiki/Workers%27_compensation
  2. https://www.allstate.com/auto-insurance.aspx
  3. https://www.thehartford.com/
  4. https://www.iii.org/article/background-on-no-fault-auto-insurance
  5. https://www.thebalance.com/how-to-get-your-driving-record-527249
  6. https://www.allstate.com/tools-and-resources/personal-umbrella-policy/whats-umbrella-insurance.aspx