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Business Car Insurance Protects You

Business car insurance protects you in numerous ways unique to this particular policy form. As most people are well aware, car insurance is legally required pretty much everywhere all across the country. There is little most of us can do about that fact other than to go ahead and get insured to avoid trouble. But something not everyone understands is the separation between personal and business insurance and the specific situations in which it is necessary to carry a business policy rather than a personal one. It is critical to know the difference and to be aware of the need to get insured despite rising auto insurance premiums as a business owner so that you can eliminate the chance of claims denial and other possible outcomes as a result of having inappropriate insurance for the way you use your vehicle.

Commercial vs. Personal Car Insurance

Most people have a fairly solid understanding of what personal auto policies are and what they cover. Basically, they insure the car and the driver as well as certain family members and passengers, depending on the specific claim circumstances and the portion of the policies in question. In a general sense, commercial (or business) auto insurance works in exactly the same way as a standard personal policy. It offers the same general coverage in the same basic categories with most of the same options available as add on endorsements. So for anyone thinking about looking into a business car insurance policy for the first time, it is a comfort knowing that at least you are not venturing into totally new territory.

But even with this being said, there are some key differences to consider. The first is in regards to the monetary level of coverage. Many company vehicles are worth a lot more than the average passenger car. So the collision and comprehensive coverage on these policies may have to cover a lot more. Large cube trucks with expensive equipment tend to cost more than small sedans, for example.

Another area of coverage that tends to be drastically different in terms of financial limits of protection is the liability policy. Liability coverage for both personal and business mandatory car insurance plans offer the same general areas of protection for covered policyholders. But even though this is the case, the amount of protection needed for company drivers tends to be much higher. There are multiple reasons for this. One is that a lot of these vehicles just carry a higher risk of getting into an accident because they are not as easy to drive as, say, a small sedan.

But another reason is that when claim situations come up in accidents and other situations involving these vehicles, the claim figures tend to be much higher on average. A big company truck can create a lot more damage than a small car. And claimants are quite often encouraged by their attorneys to seek additional damage when a business is involved in the proceedings. Now, it is necessary to point out that in civil court liability proceedings, the limit of the auto policy does not have any bearing on the judgment handed down. This is precisely the reason why drivers should always try to carry more than state minimum mandated liability policies for their own protection. But this is especially true for those who own and/or drive commercial or business vehicles. The potential judgment handed down in an auto negligence case could be enough to wipe out a company. Any excess due over and above the limits of the company insurance plan can be taken as garnishments or by other means. Companies can be bankrupted by these cases if they are not insured.

Business Insurance and Auto Claims

Another important point that should never be forgotten is this: company owners who fail to comply with state legal requirements to carry commercial policies can and will most likely be denied any coverage at all when claims come up. What this means to those of us who are self employed or running small businesses is that we need to get commercial coverage. Even if your car is titled in your name, if it is used for work purposes it needs to have commercial coverage. A personal policy will not be sufficient if an accident or other claim situation comes up on the job or during the work day. If the insurer finds out that you were using the vehicle for work purposes (and they usually will), they'll likely not only deny the claim, but also cancel your policy, leading to higher rates when you look for a new provider.

Entrepreneurs, even those who just have a pickup truck and a dream, need to be aware of their legal responsibility to be properly insured. Business car insurance protects you in ways personal policies can't.


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