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Saving Money on Your Commercial Auto Insurance

By March 23, 2021April 11th, 2024No Comments

If your business owns or operates vehicles (even employee-owned vehicles) for any official purpose, then it will need commercial auto insurance. This coverage is crucial to protecting your business against the financial ramifications caused by wrecks, accident lawsuits, third-party losses and other vehicle problems. In the end, it makes your business a lot more secure against unexpected losses.

Still, commercial auto insurance comes at a cost, and it’s only natural to want your premium to be as affordable as possible. After all, this is an ongoing overhead expense that you have to pay regularly.

However, there are plenty of ways to do all you can to save money on your commercial auto premium. With a little commitment and attention to detail, you’ll be able to always keep your rates balanced, so that you never have to worry about this cost becoming too burdensome.

Why Premiums Vary 

Auto insurers (both private and commercial) base premiums on the risk their customers have of filing a claim on their coverage. Any claim is a cost risk, and the more likely this is to happen (and the more expensive a claim is likely to be), is going to mean the insurer will spend money by compensating the policyholder. As a result, those who have high claims risks are going to pay proportionally higher rates for their auto insurance.

Depending on your business, commercial auto insurance can grow expensive very quickly. There are many factors that influence the cost of your plan. These include:

  • Location of the vehicle 

  • Vehicle types, sizes and values 

  • Number of vehicles 

  • Credit score of the insured 

  • Claims history 

  • Driving records of every driver on the plan 

  • Coverage limits and deductibles 

  • Distance being traveled 

  • Type of cargo being transported 

Some of these factors are out of your control. Certain locations have higher rates, and your business vehicles have to carry cargo designed for your business. Luckily, there are other risk factors that you can control, and which can even help you lower your rates.

Ask Employees for Driving Records

It may come as a surprise to some, but commercial auto insurance premiums don’t only account for the insured’s driving record. They also account for the driving record of everyone that will be using the vehicle(s).

If your business owns a fleet with multiple drivers, an insurance agency may ask to see the driving record of each driver that will be using an insured vehicle. A bad driving record can make your premiums go up, so be sure to ask potential employees for a driving record. Reviewing driving records can also help lower the risk of an accident occurring, and help you determine which potential (or current) employees are not best suited to operate one of your vehicles.

Choose Your Location Carefully 

Not only does the location matter, but the distance being traveled also counts. If you’re looking for somewhere to set up your business, consider where it will be delivering to. By choosing a prime, centralized location, you can both save on money from the location and lower gas mileage.

Build Your Credit 

Chances are if you’re able to start a business, you probably have good credit. Maintaining this credit is crucial to keeping your commercial auto insurance rates down. You can do this by paying off credit cards and setting up auto drafts for your bills so you never miss a payment. This will help your insurer see that you are a reliable client who is making an effort to be financially sound.

Invest in Safety

The type of vehicle being insured may cause your insurance rates to raise or lower depending on its value. Some vehicles are more prone to being stolen or vandalized, and so cost more to insure. By adding certain safety precautions to your vehicles, such as anti-theft protection, you can save money on monthly premiums.

Consider Coverage Limits 

Every business owner should be careful about the type of coverage and coverage limits they put on company vehicles. You can choose lower coverage, but this means you may owe more if an uncovered accident does occur. Also be aware of your state’s insurance requirements. Many states have legal mandates on how much insurance businesses with commercial vehicles must carry.

Other coverages may be optional, but it’s important to have enough insurance to cover comprehensive, collision and liability, as well. You can also choose a higher deductible for lower monthly premiums, but this means that you will pay more out of pocket after a claim.

Beware Multiple Claims

Having a history of insurance claims can make an insurance company wary about insuring you, and thus encourage them to charge more to cover potential losses.

Avoiding claims is achievable by ensuring drivers are trained to drive defensively and keeping your vehicle as safe and protected as possible. In some cases, you might even choose to repair minor damages out of your own pocket, rather than relying on your commercial auto insurance for compensation. That can save you the burden of filing too many claims, which in the end can help you save money in the long run.