If you use your vehicle for business purposes, it’s important to invest in excellent commercial vehicle insurance coverage. The last thing you want is to damage your moneymaker in an accident and not have the coverage you need to repair or replace it. This may force you to put your livelihood on hold, making it even more difficult for you to come up with the funds you need to resume operations.
Many business owners end up underinsured because it can be expensive to secure the full coverage you know you need. However, there are ways to obtain cheap commercial vehicle insurance without losing all the benefits. Here are five things you need to know.
1. Employee Driving Records Affect Premiums
When you’re hiring new drivers, always check their driving records at the DMV. It is worth the small fee the DMV will charge, as the screening process is an important aspect of saving on commercial vehicle insurance. How so? When you hire drivers with good records, your premium will be lower.
Similarly, if you hire drivers who have a poor driving history, you will pay a much higher premium for your insurance. Even worse, if they continue to drive irresponsibly, they may put the future of your business at risk.
2. Cargo Matters
If you own a trucking company, note that there are regulations in place to limit what type of cargo you may transport. So, before you select an insurance policy, take some time to consider your cargo. You should also consider the risks associated with each different type of item and whether or not you can afford the insurance premium to cover it.
For instance, perishable items are higher risk than clothes or canned goods. What happens if there is a delay along the route due to weather conditions or traffic, and the delivery is delayed? This may cause the food to spoil, especially if it has a very short shelf life. Is the cargo covered under your commercial vehicle insurance if that happens?
3. Risky Routes Are Expensive To Insure Against
How much extra coverage you need may also depend on the route you plan to take. Some routes are fairly easy and straightforward with minimal risks involved. However, others may include the following risks:
- Iced hills or mountain roads
- Curvy, narrow roads
- Crime and violence
- Unexpected traffic
These risks maximize the possibility that an accident or theft may take place. For example, a traveling sales representative may find goods stolen from his or her car while paying for gas. Routes with risks such as these require higher limits and lower deductibles when purchasing commercial vehicle insurance policies.
4. The Deductible Gamble
Many business owners opt for higher deductibles to lower the insurance premium. This allows them to save money in the short term, but if there is an accident or another qualifying event, they may have to dig deep into company revenues to pay for damages.
If your company has revenue at the ready to pay large amounts or operates on low-risk routes, then higher deductibles may not be such a bad idea. You could save a lot of money on commercial vehicle insurance in this way. However, as previously mentioned, risky routes should always opt for lower deductibles to prepare for trouble and frequent claims.
5. Not Everything Is Covered
When you pay as much as you might for commercial auto insurance, you may believe that you’re covered for all events. This is especially the case if you decided to play it safe and accept full coverage. However, it’s important to note that some things still fall outside your insurance policy.
Here are a few of the costs that your business will still have to pay for:
- Loss or damages due to rare or adverse events, such as war or a nuclear attack
- Damage caused by driving the vehicle outside its designated geographical area
- Damage caused by a driver other than the person named in the driver clause
- Damage related to carrying weight that exceeds the vehicle limits
- Vehicular breakdowns for mechanical or electrical reasons
- Wear and tear of the vehicle
Saving on commercial vehicle insurance requires a better strategy than just picking the least expensive plan. For cheap commercial vehicle insurance that still provides the coverage you need, consider these factors as you shop around.