5 Essentials Of Commercial Auto Insurance Liability Coverage

Commercial auto insurance liability coverage is essential to any business that uses automobiles. It will protect the business against third-party claims that arise from auto accidents. Such claims can generate massive damages awards, especially against businesses. Without adequate auto liability coverage, a business may not survive a sizable auto-related lawsuit. As a business owner, properly insuring all aspects of your business is imperative. Read on to discover the essentials of commercial auto insurance liability coverage.

Out-of-State Extensions

Out-of-state extensions are the first essential of commercial auto insurance liability coverage. Such protection is important when traveling to other states with different auto insurance laws than your home state. Most states have laws in place requiring vehicle owners to have a minimum amount of auto liability insurance. Some, however, don’t require auto insurance at all. Vehicle owners must instead prove that they have the finances to pay any damages resulting from an auto accident. If you have your home state’s minimum requirement and travel to state with a higher requirement, your insurance will cover the difference. In addition, if you travel to a state that requires no-fault or underinsured/uninsured motorist coverage, your policy will cover that as well. Surely, out-of-state extensions are one essential consideration for commercial auto insurance liability coverage.

Uninsured Motorists

Uninsured motorists are a second essential coverage consideration for commercial auto liability coverage. Around one in eight US drivers are uninsured, according to the Insurance Research Council. When one of these individuals causes a car accident, they might not be able to pay the damages. Therefore, you would be on the hook as the other party. However, the presence of uninsured motorist coverage on your policy will prevent this. Instead, your insurance company will pay the damages so you can keep your business afloat. Indubitably, uninsured motorist coverage is an essential aspect of auto liability insurance coverage.

Passive Restraint

Passive restraint systems are a third essential aspect of auto liability insurance coverage. Certainly, you may even be wondering, what is passive restraint in a vehicle. Automobiles have numerous safety features implemented, with some being categorized into active and passive restraints. Active restraints describe things like seat belts, which don’t work without human input (putting on the seatbelt in this case). Passive restraints do not require human input to work. Airbags are a good example of this; they are always primed and ready to deploy without human input. Note that airbags and many other passive restraints do not actively prevent accidents. However, the presence of passive restraints may lead to a reduction in insurance costs. Policy costs are determined by a myriad of factors, the majority of which are risk-specific. The addition of passive restraints reduces the risk to your vehicle, and therefore insurance companies will determine you to be less of a risk. Certainly, passive restraints are an essential for auto liability insurance coverage.

Combined Single Limits

Combined single limits represent a fourth essential factor in auto liability insurance coverage. Most liability policies offer separate limits for separate claims. Bodily injury claims would have a limit separate from property damage claims, for instance. In addition, limits may be separate for each individual party in a several-person accident. Combined single limit (CSL) policies will offer the same dollar amount of coverage regardless of the damage category. It will also cover however many parties are involved in an accident. Definitely, CSL policies present an essential aspect of auto liability insurance coverage.

Umbrella Insurance

Umbrella insurance is the final essential aspect of auto insurance liability coverage. Most insurance companies place a limit on the amount of liability coverage you can purchase. Five hundred thousand dollars is a good example of a limit used by many companies. Umbrella insurance will kick in once this limit has been exceeded. It will protect extra assets that may be in danger due to a lawsuit. Usually, umbrella liability insurance is available for coverage of $1 million and up. Moreover, you must have certain coverage limits in place in order to purchase an umbrella policy. You may need a certain threshold, $300,000 for example, in combined home and auto liability policies to buy. Of course, umbrella insurance is the final essential factor of auto insurance liability coverage.

There are many considerations to make when shopping for a commercial auto insurance liability policy for maximum coverage and savings. One such consideration is out-of-state extensions that will keep you protected when traveling. Another is uninsured motorists, as they can cripple your business simply by missing a payment. A third is passive restraints, which will both keep you safer and save you money on the policy. Fourth, combined single limits policies will simplify your policy, allowing you to manage it more easily. Finally, umbrella insurance is a great consideration for scaling your auto business up. When wondering about the essentials of commercial auto insurance liability coverage, consider the points above.

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