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: Sep 26, 2020

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Key takeaways...

  • Similar to personal auto insurance, commercial car insurance has requirements as to what you need for coverage
  • You need to have at least liability coverage in most states
  • Auto insurance companies give big discounts for safety equipment on vehicles

Just like personal auto insurance, commercial car insurance has requirements as to what you need for coverage.

Fortunately, there are ways to save money even on your commercial car insurance. It just takes a little time, but you can save yourself and your business a bundle if you follow the tips in this article.

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Table of Contents

Set High Deductibles

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You need to have liability coverage and, in many states, uninsured motorist and some sort of medical coverage, either personal injury protection or medical payments.

Even if you own your company’s cars outright, with no outstanding loans on them, you ought to consider carrying comprehensive and collision on them. These are expensive pieces of equipment in which you have invested, and you need to have them properly covered.

However, you can set your deductibles high to keep the costs for this down. The deductible is the out-of-pocket portion your company will have to pay for a repair.

You’ll see a dramatic savings if you set the deductible high.

Estimates for personal auto insurance are that high deductibles can lower premiums by as much as 40 percent, according to the Insurance Information Institute. Savings for commercial policies can vary.

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Get Properly Equipped Cars

One thing you have total control over in your business is the type of cars being insured. The kind of car, as well as how they are equipped, can greatly affect the cost to insure them.

Auto insurance companies give big discounts for safety equipment on vehicles. This goes for commercial vehicles as well.

While business vehicles can be anything from a small car to a delivery van, they can all be equipped with items that can help protect your employees in case of an accident.

Not only will your employees appreciate this, but your insurance company will too.

While purchasing a car for a business with advanced safety features might cost a bit more in the short term, the cost can usually be made up for in insurance.

Some things to look for are:

  • Airbags, especially side curtain airbags if possible
  • Anti-lock brakes
  • Daytime running lights

Theft is also a problem for many commercial car owners.

Consider putting a tracking system in your fleet of cars. This can not only earn you a discount on the car insurance, but it can make accounting easier as well.

Some monitoring systems can give you mileage and history, making it easier to keep your employees accountable.

Comparison Shop

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One of the best things you can do when purchasing a commercial car insurance policy is to get quotes from many different sources. There’s always a wide variance in the quotes you get from any type of insurance.

Ask the company that has your general business insurance for a quote on your commercial car insurance as well. You might find that they will give you a very good deal since you already have one policy with them.

If your business is part of any kind of professional organization, small business groups, or self-employed organizations, see if they have any connections to group rates.

You can also check with your local chamber of commerce or the bank or credit union that holds your business accounts.

Once you have a wide range of quotes, you should be able to see who has the lowest price for the coverage that your business needs. When setting up the policy, take the time to go over it in detail with a representative from the company.

Pay for Driver Safety Courses

Most businesses today have a safety plan in place. This can include what to do in case of fire or a storm, and what to do in case of a robbery.

If your company owns vehicles, you need a safety plan in place for this as well.

Before authorizing an employee to drive one of your vehicles, you can run their driver’s record to find out if they have a history of multiple tickets and accidents. You can determine who is qualified and who is not qualified to drive your vehicles.

Allowing only drivers with good driving histories will help keep your insurance costs down.

As part of your safety plan, have all your drivers take a safe driving or defensive driving course within a short time of coming to work for you.

Just as a class like this can get you a discount on your personal auto insurance, having all the drivers on the policy take them will look very good to the insurance company.

These courses can be taken online for a minimum investment on your part. Some driving schools will send an instructor to your premises for an evening class for your employees.

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Get a Rider if You Own a Home Business

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If you run a business out of your home, and use your personal car for business purposes, you might find yourself without coverage if you are in an accident while doing so. Most personal insurance policies specifically deny coverage for business purposes except for commuting.

So if you find yourself in this situation, you have a couple of options. You can call around, or use the Internet, to get quotes for commercial or business insurance just for your car for this time.

Again, if you have business insurance for your home office or equipment, see if you can add it on to that policy.

Or you can call your personal auto insurance company or agent and ask if they will allow you to buy a rider that will cover the car when you use it for business purposes.

Not all insurance companies do this but, if they do, it is usually cheaper than getting an entirely separate policy. It generally raises your premium by about 10 percent.

Look into a Non-Owner Policy

If you are a business owner with employees that use their personal cars for your business, this can prove to be a costly practice for you and your employees unless you have the proper insurance in place.

While your employees’ personal insurance policies will cover them when they are commuting to your place of business, if they run errands for you or go on sales calls, they are then using their cars for business purposes.

If they have an accident at this time, their insurance might not cover the damages at all.

Even if they do cover the damages, your business is still not covered. The other driver your employee hits could sue your business as well. The employee’s policy will not cover your lawsuit costs at all.

So, if this is the case with your business, look into a non-owner policy for your business. These policies cover you and your business when you borrow or rent a car for business purposes.

In this case, you are borrowing your employee’s car. This policy also comes in handy if you or your employees travel frequently as it will cover rental cars as well.

However, as the Texas Department of Insurance explains, a non-owner policy covers only liability. It does not cover the car being borrowed or injuries to the driver.

Be Honest

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One of the most important things you can do is to be completely honest with the insurance company, both when you are setting up the policy and as you go about your daily business.

If you have minimized the amount of miles or distance your commercial cars travel in order to save money, you could find yourself without insurance.

If your employee has an accident and, during the investigation, the company finds that he was using it for more than you insured for, they can deny coverage.

Also, only let those employees who have been put on the policy drive the vehicles. If you want all your employees to have access to the cars or vans, set the policy up that way. Be sure to add new employees as they come in and take off ones who have left.

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Don’t Skimp on Coverage

While insurance is often an expensive nuisance, if you find yourself with a claim or being sued over a claim, you’ll be very thankful you have the proper coverage. Without it, you might lose your business.

Personal auto insurance recommendation levels for liability are usually around $100,000 per person and $300,000 per accident.

However, you run a business. You’ll need more insurance than that. Experts recommend having at least $1 million in liability.

The reason is that, if one of your business cars is involved in an accident, you are more likely to be sued. This coverage pays your legal fees and the settlement. Not having to pay this can help keep your business going.

For more information about insurance for your small business, Insure U has a special website just for you.

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