If you’re a business owner in Texas, it’s essential that you have the right commercial auto insurance policy in place if your work requires a car or other type of vehicle. This kind of insurance is ideal for businesses, and it offers a variety of benefits that aren’t available with other kinds of coverage. In this article, we’ll discuss the basics of commercial auto insurance and explain why it’s so essential for businesses in the Lone Star State.
What Is Commercial Auto Insurance?
Commercial auto insurance protects businesses from financial losses resulting from owning and operating a vehicle. Unlike personal auto insurance, which is best suited for individuals, commercial auto insurance provides coverage for vehicles owned or leased by businesses. This includes everything from cars and trucks to vans and buses.
Businesses can purchase commercial auto insurance as a standalone plan or as part of a business owner’s policy (BOP). While the specific coverage options will vary depending on the insurer, most commercial auto policies protect against third-party liability, bodily injury, and property damage. In addition, many policies will offer coverage for collision and comprehensive damage, personal injury protection (PIP), and uninsured/underinsured motorist protection.
Commercial Auto Insurance Requirements in Texas
Texas requires all businesses that own or lease vehicles to have commercial auto insurance. The minimum amount of liability coverage required by Texas law is:
- $60,000 overall for bodily injury per accident
- $30,000 for death or bodily injury per individual
- $25,000 for property damage
While the state of Texas doesn’t require businesses to purchase any additional types of coverage, you should protect yourself and the value of your commercial automobile by considering additional insurance covers. The bare minimum liability coverage only protects other drivers, which means they don’t provide you with any form of settlement if you’re involved in an accident. Protect the value of your commercial vehicle and yourself by considering additional insurance.
What Does Commercial Auto Insurance Cover?
Most commercial auto insurance Texas policies will cover the following:
- Bodily injury: If an employee of the business causes an accident while driving a company vehicle, this coverage will pay for the injured person’s medical bills.
- Property damage: Property damage liability coverage pays for the repair or replacement of damaged property.
- Uninsured motorist: This will help pay for any damages to the policyholder’s car if they’re in an accident with a driver who doesn’t have insurance.
- Underinsured motorist: If an underinsured motorist hits you, this coverage will help cover the costs of your medical care and auto repairs that aren’t covered by the other party’s insurance.
- Comprehensive coverage: Comprehensive coverage protects against damage caused by events other than accidents, such as theft, vandalism, or natural disasters.
- Collision coverage: In the event of an accident that is the policyholder’s fault, this will help to pay for repairs needed to fix any damage to the car.
- Towing and labor coverage: If the policyholder’s car needs towing or roadside assistance, this policy will help cover the cost.
- Loading and unloading coverage: This policy covers the cost of damages incurred by the policyholder’s employees while loading or unloading goods from their vehicles.
- Rental reimbursement: In case the policyholder’s car needs repairs after an accident, this will help cover the cost of a rental car.
- Personal injury protection: This will help pay for the policyholder’s medical expenses and lost wages if they’re in an accident.
Only property damage and bodily injury liability are a requirement in Texas. All other types of coverage are optional but can be very beneficial, depending on the needs of the business. It’s important to note that each commercial auto insurance policy differs, and the coverage will vary depending on the insurer. Please read the policy carefully and understand what it covers before purchasing.
Who Needs Commercial Auto Insurance in Texas?
You need commercial auto insurance if you use your car for business purposes in Texas. This includes anyone who uses their vehicle to transport goods or deliver services. It also consists of any business owner allowing employees to use their car for work-related activities.
Commercial auto insurance covers you in the event of an accident, theft, or damage to your vehicle. It can also help foot the cost of legal fees if you’re sued by a motorist due to an accident that is your fault. In short, commercial auto insurance is an essential piece of protection for any business owner in Texas.
How Much Does Commercial Auto Insurance Cost in Texas?
Commercial auto insurance costs vary depending on several factors, including the type of business, the vehicles used, the driving records of employees, and the amount of coverage purchased. Because there are so many variables, it isn’t easy to estimate what a policy will cost. The best way to get an accurate quote is to contact an experienced insurance agent.
There are a few things that you can do to help lower the cost of your commercial auto insurance:
- Install anti-theft devices on all company vehicles
- Require employees to have a clean driving record
- Raise your deductible
Commercial Auto Insurance vs. Personal Auto Insurance
There are some key differences between commercial auto insurance and personal auto insurance, including:
- Coverage limits: Commercial auto insurance typically has higher coverage limits than personal auto insurance. This is because businesses have greater liability exposure.
- Driver history: Personal auto insurance rates depend on your driving history. However, commercial auto insurance rates rely on the driving history of all employees who will be driving the vehicle.
- Vehicle usage: Commercial auto insurance generally covers a broader range of vehicle usage than personal auto insurance, including business purposes such as deliveries or sales calls.
- Discounts: Commercial auto insurance often offers more discounts than personal auto insurance. For example, discounts are available for businesses with a fleet of vehicles and employees with clean driving records.
Texas is a large state with a lot of roadways and traffic. This can make driving dangerous, and it’s important to have the right insurance in place in case of an accident. We know that shopping for insurance can be confusing and time-consuming, but with a bit of research, you can find the right commercial auto insurance in Texas for you.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.