All You Need to Know About Commercial Auto Insurance

As of 2022, over 76% of the US population had access to their own car. An additional 19% reported having access to a company or family car. Besides this, as with any other economy, the US also constitutes a massive industry of trucking firms and other vendors who engage in commercial automobile purchases.

As per IBIS World, the market size by revenue of the Commercial Auto Insurance industry is $53.1bn in 2023. Just like every other purchase, buying a commercial vehicle comes with many risks that can be minimized by getting it insured. There are different insurance types, and the choice entirely depends on the use of the vehicle and one’s requirements.

What Is Commercial Automobile Insurance?

Commercial auto insurance provides physical damage and liability coverages for situations, conditions, amounts, and usage of business vehicles that a personal auto policy doesn’t cover.

This insurance covers a wide range of commercial vehicles, including company cars and commercial trucks. Learn more about the differences between personal and commercial auto insurance here.

Types of Commercial Auto Insurance

Your vehicle can be insured in a variety of ways if it is used in a commercial or industrial setting. Let’s go over each type in detail, along with the various coverages each type offers.

Motorist Insurance

These are of two types.

  • Insured: This insurance type protects the insured and the vehicle from uninsured drivers and hit-and-run accidents.
  • Underinsured: Many drivers carry minimum liability coverage to save money, but at times, such insurance doesn’t provide enough coverage. So, it is advisable to take underinsured motorist insurance to protect oneself in an accident where the driver’s insurance is not enough to cover the damage costs.

Liability Insurance

This is one of the most commonly preferred insurances, as it is a legal requirement in the US. Liability insurance covers the costs of injuries and property damage to others for which a person is legally liable as a result of an accident.

Comprehensive Insurance

This is an added layer of insurance for your car. This insurance covers the costs and damages caused by anything other than an accident; incidents such as floods, theft, etc., are covered under this insurance.

Collision Insurance

Collisions are quite common in the US. If the vehicle is hit by another vehicle and multiple automobiles get damaged, this insurance can help you cover the losses and added costs.

Aside from these standard insurance coverages, there are a few other insurances or protections that one should consider for their commercial vehicle.

Roadside Assistance

This insurance covers incidents that are not actually caused by any other entity but are self-induced mistakes like being locked out of the car, having a dead battery, or having flat tires.

Personal Injury Protection Insurance

As the name suggests, this insurance covers medical expenses caused by an accident. Though it depends on the policy provider, this insurance usually covers up to 80% of medical expenses.

Gap Insurance

A vehicle’s value always depreciates right after the purchase is made. Because the cost may not always be sufficient to cover the loan, this insurance helps pay off the loan in the event of vehicle loss or theft.

Rental Reimbursement Insurance

This insurance typically covers the cost of post-accident transportation to the nearest repair facility, ensuring that you are not stranded at any point.

Just like any other insurance policy, in commercial auto insurance, there may be various exceptions or clauses that vary from one provider to the next.

New Trends in the Auto Insurance Industry

AI-driven Insurance Systems

Technology and digital-first processes are making their way into the insurance industry as well. People prefer that insurance become AI-based, leaving less space for human errors.

As per Solera Holdings, a vehicle lifecycle management company, the trust in digital-first automated claims and repairs has lately soared to 79% globally. Bill Brower, the VP of Industry Relations at Solera, says if insurers leverage digital tools properly, they can create an “Amazon-like experience.”

Rising Demand for Roadside Assistance Insurance

Almost every other US citizen owns a vehicle, so traffic on the roads is inevitable. Accidents and collisions have become even more common. This has created an instant urge to implement roadside assistance insurance for vehicles to avoid delays in repairs or managing damages.

However, people and businesses with commercial vehicles often struggle with finding and customizing their policies to fulfill their needs and realizing the best possible value. At Gonzalez Insurance, we provide customized quotes for all your insurance needs after carefully examining your asset and risk portfolio. Get in touch with us to get the ideal commercial auto insurance policy to become street-ready today.