August 2, 2011

What Small Businesses Should Know About Car Insurance Coverage

Many small businesses need to use vehicles to deliver their services, to transport items between locations and to make sales calls. A company car can be a vital tool in business growth, but the cost of car insurance coverage can be significant for a small business. Car insurance companies offer special types of small business car insurance coverage that provide vital protection at low rates, and as these policies differ slightly from personal auto insurance policies, there are a few key things that every small business owner should know before purchasing coverage.

Most car insurance companies offer a choice between personal and commercial car insurance, and small businesses need to select commercial car insurance for any vehicle that will be used for work, even if the vehicle is also used for other purposes. Personal car insurance coverage may not pay for a claim that occurs while a vehicle is being used for business, as insurance providers will consider this to be a violation of the terms of a personal policy. Commercial car insurance may be more expensive than a personal car insurance policy, but remember that the point of car insurance is to cover unexpected expenses. Medical bills of an employee or another individual involved in an accident can quickly ruin a small business, so selecting an appropriate type of coverage is crucial.

Small businesses should opt for comprehensive coverage, liability coverage and collision coverage with affordable deductibles. Comprehensive coverage is particularly important, as this will pay for claims related to theft, hail damage and other non-collision related claims. Liability coverage is also important, particularly medical coverage, as this can financially protect employees and other individuals in a vehicle at the time of an accident. Opting into these types of car insurance coverage may increase the cost of a policy, but there are ways to decrease the costs. For instance, many auto insurance companies price their small business car insurance plans on the number of miles a vehicle is driven in a set period of time, so company vehicles that aren't used for anything other than the occasional errand will see low rates. Commercial car insurance coverage may also be less expensive if the number of drivers on a policy can be restricted. As with a standard policy, rates will be determined based on drivers' records. Small businesses with several vehicles may also be eligible for fleet insurance policies, which are less expensive per car than individual policies.

Businesses should compare rates between a few insurers before buying coverage, as small business car insurance coverage varies greatly in cost from one insurer to the next. Researching options keeps costs down without sacrificing essential protection.