You likely know that most drivers in Texas must carry car insurance. As an insurance agent, it is up to you to provide your customers with this coverage. But different drivers have different needs. Thus, you must help them choose coverage. Often, you will have to guide your clients towards a commercial auto policy, as opposed to personal coverage. Why must certain drivers have commercial coverage?
Understanding Auto Commercial Coverage
Those who drive for their business put not only themselves, but also the business at risk.
Think about some of the losses you might incur from a damaging loss. Wrecks or other incidents might damage your vehicle. These accidents might harm you or others. Whatever the outcome, the recovery costs might have to come from your business accounts. Can your operation really afford that? Most business owners don't want to face the prospect, regardless.
That's why most business owners must carry commercial auto insurance, specifically. Most personal car insurance policies won't apply to vehicles used for business purposes. However, commercial policies can protect the business' interest in the car. They can also apply if you use the car personally.
Who Needs It?
One of your clients calls you to ask if they need commercial auto insurance. What should you tell them?
Those who need coverage are those who drive for business purposes a significant part of the time. Commuting to work or running the occasional errand usually doesn't merit coverage. However, making deliveries or racking up mileage for work often make you need a policy.
Most often, those who qualify for coverage are:
- Businesses that own vehicles for specific use, such as fleet vehicles
- Employees or business owners who use their personal vehicles for official business
- Businesses that provide employees with a vehicle for personal and commercial use
- Those employed in transportation-related businesses. For example, ride share services and food delivery services might need coverage
What Will It Cover?
Your commercial auto insurance policy will need to apply to your business, specifically. So, depending on your line of business and your industry, the exact coverage you need might vary.
Most commercial drivers need at least:
- Liability Insurance: If you are found at-fault for a wreck, this coverage will help you pay for the losses of others.
- Physical Damage Protection: This coverage pays for damage to your vehicle. It might pay for damage from wrecks, fire, weather and other losses.
- Personal Injury Coverage: In the event you get hurt in a wreck, this coverage might pay your medical bills.
Talk to your customers about how, when, where and why they use their vehicles. Then work with them to establish appropriate insurance coverage for the value of all their assets.