Commercial fleet insurance

State laws dictate the amount of commercial auto coverage that is needed for your business vehicles. New Hampshire is the only state that doesn’t require business vehicle insurance, but you still need to prove you can pay for a victim’s expenses if you cause an accident. In every other state, your fleet insurance will have to meet the minimum requirements.

Just like a standard commercial auto policy, this typically includes third-party liability protection for the following:

• Bodily injury: If you cause an accident and it results in harm to another person, insurance will help cover their medical bills.
• Property damage: If you are at fault for an accident, insurance will help cover the costs of repairs to the other vehicle or any other affected property.

In addition to setting what kind of coverage is required, each state mandates minimum liability limits, including a per-occurrence and an aggregate limit.

Alaska, Maine, and Michigan have some of the highest minimum liability coverage limits. They each require policies to cover the following:

• $50,000 bodily injury liability per person
• $100,000 bodily injury liability per accident
• $25,000 property damage liability per accident

An important point about commercial fleet insurance is that it’s designed to apply to all of your employees. Since the covered vehicles are registered in your company’s name and your business is also listed on the policy as the named insured, then protection extends to anyone you designate as working for you.

Basically, any employee can be considered an insured driver on your policy without having to list them with your insurance provider. This simplifies the insurance process, especially if you have a lot of new hires or changing roles.

Of course, you can opt for coverage beyond the minimum third-party liability insurance.

This can include:

• Collision coverage: If you damage your vehicle in an accident, this will help pay to repair or replace it.
• Comprehensive auto insurance: This coverage helps reimburse you for expenses related to repairing or replacing your vehicle due to physical damage from risks like hail, fire, theft, or vandalism.
• Medical payments coverage (MedPay): If you or your passengers are injured in a vehicle accident, this kicks in to cover medical expenses, regardless of who was at fault.
• Personal injury protection (PIP) insurance: PIP is very similar to MedPay, but it’s more extensive. In addition to covering expenses for hospital visits and physical therapy, it will also handle additional costs such as lost wages and childcare.
• Uninsured motorist and underinsured motorist coverage: This type of insurance applies if you’re involved in an accident with someone who has little or no car insurance. It can help bridge the gap between what their insurer can pay you and what your expenses actually are.

Be aware that some of these types of coverage (like MedPay or PIP) are required in certain states, so it’s important to check with your insurance agent that you meet the requirements. Protections like collision coverage and comprehensive coverage aren’t mandatory in any state, but if you’re leasing or financing your fleet vehicles, then your lender may require them.

With fleet insurance in particular, your insurance company will also consider a few other factors when determining your premium. This includes:

• Number of vehicles: This is the most important factor, because the more vehicles you have in your entire fleet, the lower your cost per vehicle will be.
• Types of vehicles: While a range of vehicles—from small sedans to large semis—can be included, the more specialized the vehicle is, the more it will cost to insure.
• Age/condition/value of vehicles: Newer and higher value vehicles typically cost more to insure, and those in good condition will cost less to insure.
• Business operations: How the vehicle will be used will be taken into consideration. Is it just going to transport your workers from the office to a client’s house to perform repair work? This is less risky than a full-scale transportation fleet that drives cross-country with a semi full of goods, and would therefore have lower premiums.