Looking for Commercial Auto Insurance in Lake Orion?
Small business owners and entrepreneurs often use their own cars while on the job without a second thought. However, it is important to know that your personal insurance may not cover commercial use of your auto. As a business owner, you may have one or more vehicles, such as delivery vehicles, service vehicles or a personally titled auto’s that are used commercially. A properly written commercial auto policy covers you for accidents, injuries and other incidents that can put your investments at risk. Commercial auto policies cover personal cars, SUV’s, light duty trucks, vans and other specifically used vehicles. Use of these automobiles is associated with a range of risk factors, including how you use them, how often, what you use them for, how many miles they travel each year, among other factors. Insurance companies review these risk factors along with any efforts your company may make to improve driver safety when they assess the amount of coverage your business needs.
Coverage on a commercial auto policy
Commercial auto insurance is similar to a personal auto policy in basic coverage such as liability, comprehensive, collision and other types of coverage but these are specific to business vehicle use. Commercial auto insurance policies combine several different types of coverage – some are required and some are optional. A typical auto policy includes some combination of the following:
Bodily injury liability: This portion of the commercial auto policy covers harm to others in an accident caused by you or your employee. This coverage will provide compensation for medical costs, funeral costs if necessary and the cost associated with a lawsuit. The amount of compensation your company receives depends upon the limit set on your bodily injury liability coverage as well as your deductible.
Property damage liability: This coverage will pay the costs to repair property damage caused by you or your employee within the state of MI. This coverage is not optional but included in each auto policy issued in the state. The amount of coverage you receive is based on the state mandated limit of $1M.
Collision: This coverage is for physical damage done to your vehicle, whether by you or anyone else. This coverage is optional, unless you have a loan or lease, and there are usually deductible options that range for this coverage. The higher the deductible (the more responsibility you assume in the event of an accident) the lower the premium tends to be. You can select either standard collision coverage or broad form collision should you elect to have collision on your policy. Broad form collision is more expensive but the policy states that if you are not considered ‘at fault’ in an accident (49% or less at fault) then your deductible is waived. Standard collision is less expensive but you would be responsible for your deductibles regardless of fault.
Comprehensive: Also known as ‘Other than Collision’. This coverage is an important protection for damage to your vehicle or loss due to causes other than collision. These causes can include fire, theft, vandalism and glass breakage. This coverage is not mandatory, unless you have a loan or lease on the vehicle and there are varying deductibles for this coverage as well.
Uninsured and Underinsured coverage: This coverage is for bodily injury that protects you and your employees. If your driver is involved in an accident with a motorist who does not have adequate insurance or is uninsured, this allows an insured to collect from his or her insurer up to the limits set on the policy.
Medical payments: You may have heard a lot about the medical payments portion of your auto insurance with the state’s auto reform. This coverage is currently unlimited on an auto policy but the future reform changes is going to allow policy holders to elect specific limits. This coverage pays for medical and/or funeral expenses for you, your drivers and passengers after an accident. It is important that you keep current with the changes that are taking place in our great state of Michigan.
Optional coverages: There is a wide range of optional coverage types that may be available to you, depending on the insurance company you work with and the state so be sure to review your policy and we will keep in touch with you throughout the year as well~
Hired and Non-Owned Auto: are two optional coverages that are very important if your employees ever use their personal auto to run an errand for the business or if you ever rent a vehicle on a business trip or for use in your business. Did you know that if a staff member gets behind the wheel of his/her own car, and the business owner does not have a commercial auto insurance policy in place with proper coverage, and that employee is involved in an accident, both the employee and the employer are potentially exposed with no coverage.
A very important topic worth mentioning is the use of a personally insured auto for commercial use. There are a lot of different guidelines that must be followed when using a personally insured auto for commercial use. A few of the important ones are:
- Lettering or graphics on the exterior of an auto are usually excluded from a personal auto policy
- Auto’s used for livery (moving of people during the course of business) are usually excluded from a personal auto policy – example: real estate agent, salesmen/women, uber/lyft, etc
- Vehicles that pull a commercial trailer must be on a commercial auto policy because it’s automatically excluded on a personal auto once it attaches a commercial trailer
These are just a few examples so feel free to contact us if you have any questions about your policy. We are happy to assist you in determining if it needs to be on a personal auto or a commercial auto.
Another important note is that you may qualify to add the business use endorsement to your personal auto policy to cover minor use of your vehicle commercially. This is a good endorsement for those artisan contractors that use their vehicle for commercial use throughout the day, those that do NOT pull a commercial trailer but go from job site to job site. Again, call us to see if you qualify~
Titling of auto’s is very important for a commercial auto policy to apply~
If your vehicle is titled to an individuals name, it’s vital that your insurance agent have an auto lease agreement on record to show the validity of a company insuring a personally titled auto. When it comes to insurance, a person or a business must show ‘insurable interest’ in order to insure something or someone. If there isn’t insurable interest the carrier can deny a claim or coverage.
When it comes to commercial insurance, if you have a business name and are a legal entity that has filed with the state, the owners name typically isn’t listed on the policy. The policy is issued to the business name only. The auto lease agreement is the connection between the owner of the vehicle (whether it’s an owner or an employee) to the company. Once we have an auto lease agreement in place, our agency then adds that individual (title holder) onto the policy to as an ‘Employee as Lessor’ to provide the afforded coverage.
The right commercial insurance can protect you, your employees and your business! An independent agent like J. Jacobs & Associates can provide all of your commercial coverage in our office. We can get to know you, your business and learn how to best protect your investments
If you are in the market for commercial auto insurance, if you have coverage already but aren’t sure if it’s comprehensive or competitively priced, we will give you an open and honest assessment of your coverage. Just stop by our office or give us a call!
What commercial auto coverage do you need and how much?
What are the risks to you, your drivers, and your business that commercial auto insurance can cover? Here are just a few~
Driver Distraction and Commercial Auto Operation
The Department of Transportation in coordination with the National Highway Traffic Safety Administration investigated the impact of distraction in motor vehicle crashes in 2017 and here is what they found:
- In 2017, there were 52,274 drivers involved in fatal crashes in which 37,133 people were killed which consisted of 34,247 crashes that had a fatality with as many as 2886 crashes having more than one death
- Nine percent of fatal crashes in 2017 were reported as
- In 2017 there were 3,166 people killed in motor vehicle
crashes involving distracted drivers.
- Six percent of all drivers involved in fatal crashes were
reported as distracted at the time of the crashes.
- Eight percent of drivers 15 to 19 years old involved in fatal crashes
were reported as distracted. This age group has the largest
proportion of drivers who were distracted at the time of the
- In 2017 there were 599 nonoccupants (pedestrians, bicyclists, and others) killed in distraction-affected crashes.
This is a tremendous loss of life due to distracted driving and it typically incites lawsuits to arise from the loss of life. As a business owner with commercial auto, implementing a distracted driving program and strict distracted driving written rules as part of your commercial training process can help to minimize or alleviate the exposure and possibly offer additional discounts. While distracted driving continues to be one of the leading sources for increased insurance costs in MI it is not the only reason. There are a multitude of contributing factors to rising rates and here are a few:
- Increased number of vehicles & drivers on the road (which increases the # of accidents)
- Increased number of construction zones (which increases the number of accidents)
- Increased cost to repair vehicles with all of the electrical equipment installed in vehicles
- Increased rise in healthcare costs due to the increased # of vehicles = accidents
- Increase in annual miles driven on US roads
And the list goes on and on. Our carriers will often times have distracted driving programs or resources for your business’s employees to participate in so be sure to ask when we speak next~