Guide to Commercial Auto Insurance – Business Car Insurance Explained

Geico Lowers Commercial Insurance Rates in New Jersey – Will I be Paying Lower Rates?

If New Jersey business owners were looking for cheaper rates on their commercial auto coverage, they may have found an answer. Business owners can now purchase commercial car insurance straight from the Geico Insurance Company and they are promising a deal. Seth Ingall, regional vice president stated that, “Geico is already the leading auto insurer in New Jersey, and because we are not writing commercial auto insurance in New Jersey directly, we can meet even more of our customer’s needs. By purchasing commercial coverage directly through Geico, many business owners will see significantly lower premium rates.” New Jersey state law requires that commercial auto insurance policies have a minimum of $35,000 combined single limit coverage and now business owners have another option to compare. If you just getting started out in your new business and aren’t sure whether you need commercial auto insurance, there are several questions you can ask yourself to determine if you need to start shopping around.

What is Commercial Auto Insurance?

Commercial auto insurance is used to insure cars that are part of a business, no matter how big or small. With a business, you have increased liability risks and if you have to operate a vehicle or have employees that operate vehicles, whether personal or company owned, you possess a much greater risk. If the car is owned or leased in your name, you should purchase a personal auto policy but be wary of using the car for business purposes. If your car is owned or leased under your business’ name, you should buy a business auto policy. These are not concrete rules though and you have to make sure that you are adequately protected no matter what.

Do I Need Commercial Insurance?

At first glance, it can seem like establishing the need is pretty cut and dry but there are many businesses that operate on various levels of the corporate sense meaning that someone who works from home and doesn’t have any employees probably doesn’t need a commercial auto policy if they sit at home all day. But if they are consistently making deliveries or picking people up, it might be a wise idea to speak with an agent about purchasing a commercial auto policy.

Esurance.com has a good list of questions that you can refer to when trying to figure out if you need commercial auto insurance. They include things like, “Are any of your vehicles used for pickup or delivery of goods, including supplies, materials, newspaper, pizza, other food items or for messenger services?” or “Are any of your vehicles a pickup , van or utility vehicle with a gross weight exceeding 10,000 pounds, or do any of yoru vehicles have a rated load capacity over 2,000 pounds?” You may not know the answers to questions like these off the top of your head if you are just starting your business, but they are good to have for future reference.

Purchasing Commercial Auto Insurance

Just like when you insure your persona l vehicle, the insurance company is going to want to know certain bits of information that are going to help determine how much your premiums are. The number of vehicles you need to insure and how many people are going to be driving them is a big factor. The person working from home making deliveries is going to have a cheaper premium than someone that owns their own moving van company with 5 different large capacity vehicles. Businesses that have many cars and drivers will want to look into fleet insurance. These prices will depend on the type of vehicle and several other factors but it may save you more money rather than purchasing auto coverage for each individual vehicle. Other options that you will need to look at when considering coverage includes liability, personal injury protections, and medical payments. You can also add options like roadside

assistance. The process isn’t too dissimilar from choosing your personal auto plan but they do differ in some aspects.

Commercial Auto Coverage vs. Personal Auto Coverage

One of the main differences between your personal coverage and your business coverage is going to be liability limits. The net worth of your company may be worth more than your personal net worth so the risks are often higher if your business car is out on the road. People can sue you for more money so it is considered a high risk liability if you own a company vehicle. You need to be aware that if you are driving a car that is insured under your personal auto coverage and are on a business errand and get in an accident, there’s a chance that your insurance company could deny your claim. The fact that you were using your car for business purposed could violate the terms of your contract.

Making a Decision

There are definitely benefits to purchasing commercial car insurance. Having the peace of mind that someone is going to pay for any damages that occur while you are on the clock is worth a premium. As a business you have increased risk and the possibility that someone could sue you is very real. With commercial auto insurance, you are covered. Just like with any insurance policy though, you need to shop around and find the best rates once you’ve determined the amount of coverage you need. And if you live in New Jersey, you just got another vendor to compare rates. Options are a good thing.