Many business owners think that all car insurance is one and the same, but it isn’t; and that thought has been the reason behind many expensive lessons. Company car insurance isn’t limited to the type of business that is covered in the event of an accident. In most personal insurance policies, there is a claim that states that business related claims will not be paid. That knowledge comes too late for some business owners because of the expenses related to collisions.
Company Car Insurance Costs
Company car insurance is normally more expensive than personal car insurance for many reasons. There are special riders that may have to be added to the policy to ensure coverage for the company’s vehicle. Extremely expensive equipment may have to have an additional rider added because it’s not a normal business expense for most companies.
The company car insurance premium can also be expensive if it’s a car that is driven frequently. A delivery van will have a higher premium than a vehicle used to transport clients. The reason is because the delivery van has a higher risk of accident because it is driven more frequently and the cargo also has to be insured. When looking for company car insurance, the frequency of use has to be considered as well as the type of vehicle, equipment and use that it will serve.
Other Factors that Affect Company Car Insurance Rates
When business owners do have company vehicles, they need to be careful about who is allowed access to driving them. Company car insurance providers require the names and driving records of the employees that will drive these vehicles. They look at the driving records just the same as they would for personal car insurance. If a driver has an awful driving record and the company insists on having them drive, the company’s car insurance will increase.
When looking to have employees regularly drive company vehicles, they stress the importance of being a responsible driver. As with any insurance policy, the more claims filed, the higher the premiums go. Also, most company car insurance policies will not pay claims for accidents that have nothing to do with conducting company business. If an employee decided to run an errand in the company car and had an accident, the insurance would not pay the claim if there is no proof the accident happened while conducting company business.
Discounts on Company Car Insurance
Although there are many expenses to be considered when looking at company car insurance, there are ways to get a discount. There are insurance companies that offer discounts for multi car or fleet coverage. The more cars there are to insure, the cheaper the premium will usually be. Companies that need company cars should also screen their drivers carefully and make sure they understand the consequences of abusing the use of a company vehicle. Business owners should never hesitate to ask for discounts on their company car insurance at least every year when renewing their policies.
Conclusion
While company car insurance is expensive, it is a worthwhile investment. There are many things that can happen to company cars and the expense of a major accident can bankrupt a company. Before buying any company car insurance, shop around for the best coverage and price. Good luck!