Commercial Automobile Insurance

commercial automobile insurance

Commercial Vehicle Insurance is designed to provide legal road coverages for vehicles owned and used in a business owners operations. Many types of vehicles may be used as commercial vehicles, depending on the type of business and the services offered. Typically tools or merchandise are carried in these vehicles.

There is a myth that commercially rated vehicle insurance premiums are more expensive than private passenger premiums. Because of this myth, many business owners’ vehicles are not insured properly. Recently we insured a landscaper who provides lawn cutting and trimming services. He has a solid customer base and through the week would tows his lawn equipment to his client’s dwellings on a weekly basis. Upon reviewing his file,  we discovered that his vehicles had been insured for over 10 years with the same insurance provider for pleasure use! After quoting his vehicles and trailers his premium for the proper commercial vehicle insurance was cheaper.

Benefits of Commercial Vehicle Insurance

  1. Ease of use – a small device that is easily installed is plugged into the OBD port of your vehicle which then records the driving habits of the operator.
  2. Lower Business Expenses – helps businesses by providing a tool to assist in reducing insurance costs that contribute to lower expenses for the business overall.
  3. Customized – your customers will realize a car insurance premium that reflects the way they drive.
  4. Access to Information – owners of the business will have the ability to access online resources to view the driving habits of each individual driving within the company. The information gathered can be used to help drivers improve their on-road performance.
  5. Risk Free – there is absolutely nothing to lose. Your premiums will not increase due to poor driving habits.

How Pricing is Determined

So how is a price determined for a commercial vehicle insurance plan? There are several factors involved in how an insurance company generating a price for a commercial vehicle:

  • First, the type of vehicle and the occupation of the insured is considered. Insurance companies have different class codes depending on how the vehicle is used, based on the operation of the business. For example, some businesses, such as a metal scrap hauler who is driving to various locations in a day compared to a tradesman who typically parks their truck at one job site is classified as more risky.
  • Second the driving experience of the listed drivers has an impact on the insurance. For example if a driver has numerous tickets or accidents they will pay a higher price. Often new drivers who have no experience driving a commercial vehicle pay higher prices.
  • Thirdly, the radius of operation is considered by the insurance company. Is the business using the vehicle in a short or long radius on a daily basis? The number of kilometers driven in the vehicle has an impact on the price of the commercial vehicle insurance.
  • Fourthly, the weight of a vehicle and trailer has an impact on the price. Vehicles are classified as light and heavy based on the gross vehicle weight. A heavier vehicle such as a straight truck will have a different price compared to a light truck such as a Ford F150.
  • Lastly, there are discounts that are eligible for commercial vehicles that can reduce your price. These include winter tires, aftermarket alarm systems, GPS tracking systems, multi vehicle and multi-line discount for having the business’s commercial liability policy insured with the same company.

Want to know more?

If you are looking for commercial vehicle insurance plans, contact Absolute Insurance. We provide you with the information and products to help you make the best choice for your insurance premiums.

Get Your Quote Today!

Call 1-877-941-2266 or fill out this form and we will personally call you and help you with your insurance needs.