Auto Insurance Coverage for Small Business

By Compuquotes Team on April 19th, 2008
Auto Insurance

Small businesses need a variety of different insurance coverage, and one of the more common forms of coverage needed is auto insurance. Auto coverage for small businesses can be a gift or a curse depending on your insurance agent. There are many different factors that you need to consider when you are ready to purchase auto coverage for your small business.

First off, you must consider the number and type of vehicles that your organization owns. Obviously the more vehicles you own the higher your auto coverage will usually be. Yet, you may find higher rates for vehicles such as 15 passengers vans, work vans, and some SUVs. These vehicles have a higher center of gravity than the average car; therefore, they have a greater chance of flipping over. Remember, that business auto coverage is similar to your personal coverage; so, some of the rules still apply. For example, newer vehicles are more expensive than older ones. Also, if possible try to steer clear of exotic vehicles and those that have parts that are hard to find.

Next, you need to have a rough estimate of how much auto coverage your small business will need. This is important to consider before going to meet with agents. So, you can avoid getting saddle with more coverage and costs than you actually need. Ask yourself, �How much traveling will my business require?� In order to answer this question accurately, consider whether or not the service you provide will mandate more than just �coming and going,� traffic. For example, if your small business is a delivery services, you will need more auto coverage than a small restaurant business.

After you look at your vehicle, it's time to shop for auto coverage. Make sure you are familiar with the agents in your city and the insurance companies that they write policies for. The most important thing to remember when you begin to meet with agents is that, insurance agents are a lot like salesmen. And, many will not have your organization's best interest at heart. Some will tell you half truths. The most common auto coverage half truth is that the state will not allow them to write a policy over a certain amount. The fact is that $1,000,000 is the standard coverage amount. Now, if you are looking at a small agent they may be unable to write a policy over a certain amount. So, if you needed an auto policy for $2,000,000, due to the fact that your organization's services revolve around driving, a bad insurance agent will tell you half truth and convince you that the additional coverage is not needed. The better agent will tell you the truth and offer other solutions, such as purchasing auto coverage with excess coverage to meet your needs. Be sure to read your auto policy carefully to ensure that your business' needs and risks are covered under the policy.

However, if you have done a small business auto assessment by asking yourself questions regarding the amount of travel needed and you realize that you don't have much auto liability, because your organization itself does not own any vehicles. Consider adding a hired and non owned auto endorsement to your general liability policy.

Small business must do their homework before going out to speak with insurance agents. Knowledge is power, and the more you know the better your position.

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