From owning or leasing a handful of corporate cars to a fleet of large delivery trucks-and everything in between-auto insurance for business vehicles protects your company from financial responsibility in the event of an accident. Without the proper type and right amount of insurance coverage for your business vehicles, you can place your entire business at risk.
There are many factors to consider when choosing the right auto insurance for business vehicles, and each should be discussed with your insurance agent. Some of the basic information that will determine your commercial insurance includes state requirements, the number of vehicles, type of vehicles, number of drivers, type of drivers, the value of the vehicles, the purpose of the vehicles, how often the vehicles are used, and the value of your business.
If this seems like an overwhelming list, keep in mind that there are also many steps you can take to reduce the cost of your auto insurance for business vehicles. Some are similar to your personal auto insurance and others are specifically related to your business. Here are several factors that affect your premiums and what you can do to keep them as low as possible:
• Deductibles: Raising your deductible will lower your premiums, but be careful not to select a deductible that is higher than your business can reasonably afford in the event of an accident.
• Safety and security: Alarms, GPS tracking, air bags, and parking vehicles in secure locations can also lower premiums. For example, if you park all of your vehicles in a fenced-in lot, many companies will see this as much safer than having employees taking vehicles home.
• Drivers: The quality of your drivers is one of the main cost factors of your auto insurance for business vehicles. You probably already did a background check on your drivers’ history during the hiring process but, if not, expect a thorough review of their DMV records for accidents, DUIs, and other violations.
• Prior insurance: Depending on the insurance company, you may also see savings by maintaining continuous insurance coverage without any lapse.
• Paying upfront: Many business auto insurance companies offer a discount if you pay the full amount of your policy all at once, which saves you administration and interest fees.
• Claims history: Not having a history of accidents and filing claims will also typically lower your rates. The agency is taking a risk on your business, and will generally deem your company a good risk if you have a track record of being safe.
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• Business experience: Some companies that offer auto insurance for business vehicles offer discounts if you’ve shown your company’s viability by being in business for at least three years. You can also get discounts if your business has a history of good credit.
• Investing in driver training: Depending on the insurance company, you may receive a discount by having drivers enroll in a driver safety course. In all cases, you will ultimately save money when you pay for driver safety training because your drivers will likely have fewer accidents-which means fewer claims and better rates.
Of course, the type of insurance matters as well. Do you just want to protect your fleet with liability insurance, or do you want to consider collision or comprehensive insurance as well? These are just a few of the many factors that will impact the cost of your auto insurance for business vehicles. Your ultimate goal is to obtain the most coverage while paying the lowest premium, so your next step is meeting with an insurance agent to review your options.
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