If you sell commercial auto insurance, then you probably know that this is different from personal auto insurance in a lot of ways. Even though it looks very similar, it pays in different ways and includes different coverage. The key is to communicate those differences over to your clients. Agents need to keep a few important ideas in mind when helping prospective buyers enroll. It helps if you take the time to point out some of the highlights of business auto insurance.
Coverage is the Law
Nearly every state requires all licensed drivers to have auto insurance or some other proof of financial responsibility. That goes for drivers who drive for business, too.
In most cases, a driver must buy minimum amounts of liability insurance, also called at-fault insurance. It pays when the policyholder is the party that caused a vehicle accident. It pays for damage done to the vehicle or other property of another driver or party. It can also pay for the injury costs of the other driver or their passengers if they sustain injuries.
Commercial drivers usually must buy at least the same coverage required of private drivers. However, specialty commercial drivers might also face a requirement to buy additional protection. This might include not only higher liability coverage, but also more-specific types of liability and physical damage protection. The idea is that the insured business can take responsibility for the risks they might cause to other drivers on the road.
When advising clients on their coverage needs, account for all coverage the law requires. Only after including this coverage and discussing its benefits with clients can you venture to add more protection to the policy.
Not all Clients Need Commercial Coverage
The general rule of commercial auto insurance is that a vehicle used for business needs coverage. However, that definition might confuse some people. As their agent, it is your job to help them determine if they need a policy.
If someone drives their personal car to and from work each day, then they don’t need commercial auto coverage. Running the occasional work errand usually doesn’t merit coverage, either. However, a vehicle that has tight connections with the business might need coverage. Some of these might include:
-
Vehicles owned by the business.
-
Personal vehicles used for business purposes, like deliveries or business-related travel.
-
Vehicles that a business provides for an employee to use full-time.
If one of these vehicles has company branding on it, then it likely needs coverage. Still, even if the client is someone like a realtor, then they might need commercial auto coverage. Realtors frequently drive their own cars to visit properties or transport clients or materials, after all. Even if you are self-employed, but use your car as an essential asset, then you might need coverage.
Insuring Multiple Vehicles and Drivers
One benefit of commercial auto insurance is that a business owner can use it to insure many vehicles and drivers. A fleet policy or multi-vehicle commercial auto insurance policy can come in handy. It is usually possible to add multiple employee drivers to the same coverage.
However, doing so will require attention on the agency’s part. Differences among the vehicles the business owns might merit changes in coverage. Some clients might not be able to insure all of their fleet vehicles on the same policy, either.
Also, by adding drivers to the policy, the insured assumes responsibility for this driver’s conduct. Therefore, drivers who have tarnished driving records likely should not qualify to drive a commercial vehicle.
As an insurance agent, it remains your job to make sure you build a policy for the client that always protects them. It is best that you do all you can to gather appropriate information about your client and their vehicles before researching policies. This can guide you as you help them build coverage.
Posted Monday, July 12 2021 3:22 PM
Tags : Commercial Auto Insurance
|