When businesses own vehicles, they need commercial auto insurance. It is a lot like the average car insurance policy, but is designed to protect a business’s investment in vehicles and employee drivers. It’s only natural that in the event of an accident involving one of these vehicles, the business might want to use their commercial auto policy to pay for vehicle repairs. Fortunately for them, commercial auto insurance can provide this assistance through a benefit called collision insurance.
Collision insurance can be a very powerful aid to businesses that have to repair or replace company vehicles following a wreck. All in all, it’s there to help them ease their financial burdens under the circumstances. However, it is not all-encompassing, which is why you must work with your commercial auto insurance agent to optimize your benefits.
When Does Collision Insurance Help Businesses?
Collision insurance comes as part of your commercial auto policy’s physical damage coverage. It is designed specifically for the purpose of helping you make vehicle repairs when you strike another object while driving. It might apply in several situations:
Your business truck backs into a wall, creating damage to the rear of the vehicle. Your driver simply did not see the wall.
Your driver is unable to stop in an accident on a roadway. He or she strikes another car. Collision insurance covers damage to your vehicle. Your liability insurance covers damage to another party’s vehicle.
A vehicle tumbles down the side of the roadway because the driver did not park it properly. The damage is significant. The coverage applies here.
Essentially, if damage occurs to your vehicle while you are driving it, then collision coverage will be able to step in. However, it does not cover vehicles when they are damaged by hazards like fires, severe weather, hail, flooding or vandalism. In this situation, separate physical damage benefits called comprehensive damage coverage will apply.
Do You Have Enough Coverage?
You naturally want your collision coverage to pay as much as possible for your vehicle’s damage following an accident. You also want to use it to pay for a new vehicle in case your present vehicle is totaled by an accident. In either case, you might not be compensated based on 100% of the value of the expenses.
Deductibles will apply to collision claims. If the cost of your damage falls below the value of your policy deductible, then your plan won’t even cover the cost of your claims.
If a commercial vehicle is deemed a total loss following a wreck, your commercial auto policy will likely pay you based on either a vehicle’s actual cash value (its used value at the time of the wreck) or based on replacement cost value (the value of a like-new car).
With commercial auto insurance, it is important to have very specific coverage to meet your needs. Take a closer look at what coverage is best for your company. Work with your agent to get a specific level of protection in place to minimize any risk.