The Pitfalls to Avoid When you Compare Business Car Insurance

When you compare business car insurance, be clear about the vehicles, know what business car insurance is, and know how to reduce costs. Learn more about comparing business car insurance below.

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Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Sep 15, 2020

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Here's what you need to know...

  • If you use a vehicle for business purposes, you must purchase business car insurance
  • Depending on your circumstances, different types of business car insurance may be a better fit for you
  • There are things you can do to help bring your premiums down


Whether you use your personal car for business purposes or run commercial automobiles, you must undertake a business car insurance comparison to get the best rates possible.

Getting commercial auto insurance is an important step towards protecting your business and yourself. Before signing up for commercial auto insurance, make sure you talk to a trustworthy business insurance professional to get proper guidance.

Type your ZIP code into the FREE search box and we will send you a list of quotes that will cover as much ground as your commercial vehicles!

According to Forbes magazine, commercial auto insurance is one of the thirteen types of insurance that a small business owner should purchase. Not only does commercial auto insurance protect the company vehicles, it also protects the employees driving them.

Understanding Business Car Insurance

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Business car insurance can be defined as insurance drawn out by businesses to protect the vehicles used for business purposes and the employees driving them as well as business assets in case of legal troubles arising from an at-fault accident.

According to the Insurance Information Institute, business owners require almost the same forms of insurance coverage for the vehicles they use for their work as they have for their personal automobiles.

The choices include:

  • Liability
  • Medical coverage
  • Property damage
  • Comprehensive and collision protection

Regardless of whether you work from home and use your personal automobile for work-related driving or you have a range of commercial vehicles in your company, you must purchase commercial auto insurance.

You must conduct a thorough business car insurance comparison and get the best possible coverage for your company if you are using a vehicle to:

  • Deliver your products
  • Meet or transport clients
  • Move tools or equipment
  • Provide services
  • Use rental vehicles for work

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The Importance of Business Car Insurance

According to the Centers of Disease Control and Prevention, automobile related accidents are consistently the main reason for work-related death and injury in the U.S.

Indeed, a whopping 35 percent of work fatalities are connected to vehicles.

Given such statistics, it becomes imperative to get business car insurance to protect your company from the costs of any accidents that occur.

Besides protecting you from bodily and property damage or destruction costs, commercial auto insurance also covers you in the case of legal problems.

So, make sure you get the best possible commercial auto insurance to safeguard all the hard work you have put into building your company into a successful venture.

Different Forms of Commercial Auto Insurance

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Much like personal car insurance, there are different forms of commercial vehicle coverage.

  • Liability insurance – Liability insurance is the most basic form of insurance. It protects drivers and their families from financial disaster in case of an at-fault accident. LI pays for property damage done to vehicles, buildings, lampposts, and fences.
  • Comprehensive insurance – This is an important and highly recommended form of commercial insurance. It will protect your vehicles and its drivers from all forms of damages except those caused by a collision.
    • Theft or vandalism
    • Catastrophic weather events like hurricanes, snowstorms, tornadoes or other acts of God
    • Human mistakes such as dented fenders due to a runaway stroller or cracked windshield from a poorly aimed basketball
    • Falling trees
  • Collision insurance – As the name implies, this covers all damage or destruction caused by a vehicular collision. Collision insurance pays towards replacing your vehicle at market value and repair costs.
  • Uninsured or underinsured motorist protection (U/UI) – As the economy stutters, businesses are hurting. Another fallout is the rise of uninsured or underinsured drivers on the road today.

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Tip 1: Be Clear About the Number of Cars and Drivers

Commercial auto insurance companies are likely to offer different kinds of coverage that is determined by the number of automobiles and drivers you are going to insure.

For instance, if you have a large number of vehicles and drivers to insure, fleet insurance might be an optimum option. Such plans allow you to add or remove vehicles and drivers in the middle of the plan without major administrative hassles.

Insurance companies also offer the option of tailor-made commercial insurance plans if you have a fewer number of cars and drivers.

Additionally, make sure you clearly list the names of the insured in your commercial auto policy. Your policy should list the whole name of the company, the titled owner of the company, any affiliates who might be using the vehicles, as well as all the employees of the companies.

Whether you need composite insurance or individual per vehicle policies, do a robust business car insurance comparison to get the best bang for your business buck!

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Tip 2: Know the Definition of Business Auto Insurance

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If you use your personal automobile for business purposes, your own car insurance will not suffice. You will need to get commercial insurance, which will clearly define the scope of coverage.

Make sure you read and understand the limits of your commercial vehicle insurance. If you have any questions, you should contact your insurance professional and get clarity on the terms and conditions.

Additionally, certain businesses are required to meet federal and state regulatory standards while running their vehicles.

It is better to be aware of any exclusions and repair any gaps before any unfortunate accident occurs rather than get caught wrong-footed after a crash.

For instance, if you are using one of your vehicles to cross state borders while hauling cargo, there are specific Department of Transportation mandates for insurance that you must comply with.

Alternatively, if you are using leased or rental vehicles for commercial purposes, you will need to purchase hired or non-owned vehicle coverage.

Before any major transportation-related undertaking, you must acquaint yourself with all the insurance nitty gritty. Talk to your commercial insurance professional and get all the terms and conditions clearly defined by your insurance company.

Tip 3: Means of Reducing Business Car Insurance Costs

Every business operates to make the maximum profit possible. Saving money is an easy way to add to profits! Therefore, as a business owner, you can take the following steps to lower your commercial auto insurance costs.

  • Employ safe drivers – Much like personal auto insurance, a clean driving record from you and your employees will make a difference to your company insurance costs. Make sure you hire people with legitimate drivers’ licenses and safe records.
  • Use specific vehicles – The type, year, model of the vehicles you use for business is likely to make a substantive difference to your insurance costs. Sports cars and overly large SUVs are expensive to insure.However, vehicles that rank high on crash tests by the Insurance Institute for Highway Safety will be cheaper to insure.
  • Lower your deductible – If your business is able to absorb a high deductible in case of a car crash, you might consider raising your deductible to as high an amount as is affordable. This will help you save a substantial amount of cash.
  • Install safety equipment – Fit your commercial vehicles with anti-theft devices and lifesaving gadgets such as alarms, GPS tracking systems, seat belts, air bags, and rear view cameras, among others.
  • Consider your location – While you might not be able to change your business location, it is important to know that this can make a difference to your insurance costs. For instance, if your business is located in a high crime area, you are likely to be charged a higher premium to compensate for the higher likelihood of theft and vandalism.

Buying Insurance for Your Commercial Vehicles

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Running a business is a tough job, especially in today’s economy. So every dime saved is likely to make a difference to your company’s bottom line.

As technology makes it easier to find information about insurance and raise insurance quotes, make sure you conduct a thorough investigation of the insurance companies that send you attractive offers.

Look into their customer service reviews, claims repayment patterns and timelines, flexibility, and most importantly, their financial position.

You can use resources such as A.M. Best, that provides an in-depth look at established insurance companies and their economic situation.

Type your ZIP code into our FREE search box, and we will send you a comprehensive list of commercial vehicle insurance quotes!

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