Overview of Commercial Auto Insurance
As business owners, we need insurance coverages for the cars, trucks, vans, or other vehicles that we use for business purposes.
Commercial auto insurance will financially protect your vehicles when you drive a car, truck, or van for business purposes. Personal auto insurance isn’t enough and won’t cover the vehicle if you (or an employee) get into an accident while driving for business.
Commercial auto insurance can cover everything from company cars to food trucks to delivery vans.
Almost all the countries require you to purchase liability insurance for bodily injury and property damage that may result from a vehicle accident occurring while you or someone from your organization is driving on business. While some have mandatory requirements for you to have uninsured/underinsured motorists’ coverage and/or medical payments coverage (known as Personal Injury Protection (PIP)).
You can choose different coverages, for your various vehicles which are scheduled or listed on the policy, depending on the vehicles’ features (size, age, theft rating, and safety rating) and the coverage you need for it.
Types of Vehicles Covered
The scope of coverage in the Commercial auto policy can be either broad or narrow, depending on your choice of options.
In general, you have three options for which vehicles you choose to cover.
- Autos your business owns
- All autos your business owns, hires, or leases
- All autos used for the business, including those that your business does not own, hire or lease
Generally, the third option is commonly chosen by the business organizations, since that is the only coverage that protects the business from liability when an employee or owner is driving a personal vehicle on business.
Commercial Auto Insurance Coverages
The types of coverage available with commercial auto insurance:
- Property damage liability pays for damages to another person’s property, such as their car, when you are at fault in an accident.
- Bodily injury liability pays for the injuries you cause another person when you’re responsible for an accident.
- Combined single limit (CSL) offers one limit for property damage claims and bodily injury claims.
- Collision insurance pays for damage to your business vehicle when it hits another car or an object, such as a pole.
- Comprehensive insurance pays for damage caused by weather, fire, falling objects (such as tree branches), and other problems. It also covers vehicle theft.
- Medical payments and personal injury protection (PIP) pay for the cost of medical care for you and your passengers, no matter who was at fault.
- Uninsured motorist coverage pays for your and your passengers’ injuries if your vehicle is struck by an uninsured driver.
Some pointers about the problems and their solutions faced in Commercial auto insurance
Problems faced by carriers in Commercial Auto Insurance
- Loss ratios are very high for this Line of business, and it is even growing further.
- It is difficult for carriers to make money in this line due to heavy losses frequently
- The Claims are relatively lesser but usually large in amount.
- Litigations are very common and tend to happen when claims are not resolved quickly sometimes securing huge settlements
What the Insurers are doing to minimize the loss
- Carriers are providing lower premiums for companies that incorporate safety standards and tools like electronic logging devices.
- Carriers are investing heavily in technology advancements.
- AI and machine learning systems are helping organizations close claims faster and relieve some of claims management teams’ administrative burdens.
The top Five Commercial Auto Insurance providers in the United States are:
Fecund and Commercial Auto Insurance
Fecund provides software development and IT consultancy services to companies in the Insurance domain. Fecund strives to provide innovative solutions that impact the business and act as a catalyst for its partners in bringing products faster to the market. Fecund has prior experience in implementing Commercial Auto Insurance solutions for various American clients for different states in the Guidewire and OneShield platforms.