Commercial auto insurance is an important investment. It provides protection to your business for many needs. It also provides coverage to cut losses associated with accidents you or your drivers cause. This liability component may be one of your most important investments. Claims can be high, so companies need to consider the right amount of protection. Here are a few key factors to keep in mind.
How Much Is Enough?
There is no simple answer to this. The amount of liability insurance you need depends on many factors. First, your state will require you to carry at least certain amounts of coverage. However, in most cases, the minimum amount of coverage for you is $100,000. This applies to each vehicle you own. However, most companies carry at least $500,000. In some cases, $1 million in liability insurance is an option. Where does your company fall in this area?
One factor to consider is the type of vehicle you operate. If you have a large truck or a heavy construction vehicle, these might cause significantly more damage in an accident. A passenger vehicle, by comparison, might not cause as much. The larger and heavier the vehicle is, the more important it is for you to have a high-dollar value policy.
Local Risks and Driving Factors
How often do your vehicles hit the road? If they are on the roadways all the time, that increases the chances for an accident. Even if drivers operate just a few days a week, that may still put you in a higher risk category than a car that you use infrequently. Also, consider local risks as opposed to long-distance travel. How you operate your vehicle can matter. Operations on highways can be more expensive than those located in smaller communities.
Customized Policies Are Important
All vehicle owners need to have commercial auto insurance for business-owned and used vehicles. However, the maximum amount of liability insurance may not be enough to protect from loss. Some companies choose to extend their coverage further. They add a business commercial umbrella policy. This can provide more protection for liability claims of all types, including commercial auto coverage. It can apply to both vehicle risks and non-vehicle risks.
Contact a Mayflower Insurance agent to learn what the average risks are in your area. What are the average liability claims for vehicles like your own? We can offer suggestions on coverage. Yet, more coverage may not be that much more expensive. It can provide you with significant protection, though.
Also Read: The Liability Coverage of Your Trucking Insurance