Insurance

If you use vehicles to operate your business, one of the best things you can do to thrive is to get third-party commercial vehicle insurance.

Third-party commercial auto insurance policy offers excellent financial protection for your business. It minimizes significant financial losses due to unpredictable events when your business vehicles are on the road. This type of commercial vehicle insurance policy is also very affordable, so the costs of your business operations remain low.

Here is everything you need to know about third-party commercial auto insurance.

What Is Third-Party Commercial Vehicle Insurance?

Third-party business vehicle insurance is basic liability coverage for commercial motor vehicles. It covers losses, including property damage and bodily injury to third parties only (not you) if your business vehicles cause an accident.

It’s different from comprehensive insurance, which offers personal injury protection and collision coverage for your vehicles, even if you are the at-fault party in an accident.
‘Third party’ often refers to external entities involved in the accident and not associated with your company. This may be people or businesses.

How Does Third-Party Commercial Auto Insurance Policy Work?

Suppose you have third-party commercial auto insurance coverage for your business vehicles, and one of these vehicles is involved in an accident that causes harm to others and damage to their property. In that case, those affected individuals can take legal action to seek compensation for the injuries and property damage they’ve suffered.

In such a situation, your insurance provider will step in to cover the costs associated with the property damage and injuries sustained by the victims.

You won’t have to pay a dime out-of-pocket unless the claim made exceeds your business vehicle coverage limits. In such a scenario, you’ll pay for the amount above your commercial vehicle policy limit. Still, commercial vehicle insurance companies cover a chunk of the total cost needed to compensate victims of commercial vehicle accidents.

In addition to bodily injury and property damage compensation, your insurance provider covers your legal expenses throughout the lawsuit. A third-party commercial auto insurance cover ultimately saves your business from substantial financial losses in claim settlements and legal fees after an accident.

What Coverage Options Does Third-party Insurance Policy Provide?

Third-party commercial auto insurance policy offers two major types of liability coverage:

Bodily Injury Liability Coverage

Bodily injury commercial auto coverage includes medical payments coverage, where the insurance company covers the medical bills of third parties injured during the accident. These may be occupants of other vehicles involved in the accident or non-occupants like motorcyclists and pedestrians. Insurance providers also cover funeral expenses for third parties who lose their lives.

Property Damage Liability Coverage

Property damage liability insurance covers physical damages to others’ property in an accident. Third-party property damages extend beyond the damage to the injured victims’ cars and might include buildings nearby that get damaged as a result of your accident.

Insurance providers offer physical damage liability coverage through replacement costs settlements or actual cash value settlements.

Who Needs Third-Party Commercial Vehicle Insurance?

You need third-party commercial auto coverage if you own or lease vehicles and use them for business operations. It’s the basic business liability coverage legally required in most states. Most states set specific minimum liability coverage limits you must meet for bodily injury and property damage compensation, affecting your commercial auto insurance cost.

You are also required, by law, to get business auto insurance for your vehicles if you transport goods or people from state to state. You may need commercial truck insurance for larger commercial vehicles, like semi-trucks.

Accidents involving larger commercial vehicles, such as tractor-trailers, are often more severe than those involving other business autos. Regular commercial car insurance, therefore, may not provide adequate coverage for your large commercial vehicles.

Note that additional specialized coverage is mandatory if you use your business-owned vehicles for the following business purposes:

• Transporting hazardous materials
• Delivering food
• Offering taxi services

Further, the law requires all vehicles registered as commercial vehicles and those with a commercial license tag to have a commercial auto insurance policy. These may include:

• Hired passenger-type vehicles to transport people.
• Pick-up trucks that have a permanently attached camper
• Station wagons
• Multipurpose vehicles

You may also benefit from a third-party business auto insurance policy if you use your private vehicle for work-related errands like shopping for office supplies. Most personal auto policies don’t cover bodily injury or property damage incurred when using your private vehicle for business purposes.

Should You Finance Your Truck and Get Insurance?

Insurance is mandatory. Business vehicle owners require the minimum third-party commercial car insurance to operate in all states except Virginia and New Hampshire. Yet, purchasing commercial auto insurance in these states is still advisable.

On the other hand, financing your truck is a personal preference. We recommend it because it’s an affordable way to start or grow your business. This is especially true if you partner with expert truck financing institutions like Mission Financial Services.

Typically, the two go hand in hand. Most commercial vehicle loan lenders require that you purchase commercial auto insurance if they finance your truck.

Other Reasons To Consider Getting Commercial Auto Insurance

A commercial auto insurance policy helps you run your business at ease. It reduces the uncertainty of dealing with the risks your business autos are exposed to.

Business insurance promotes a steady cash flow. You can write off the insurance as a business expense and plan for your finances accordingly.

Liability Insurance saves you money. You avoid hefty financial penalties by complying with all statutory and contractual requirements. You also save thousands to millions of dollars when commercial auto insurance covers medical payments, property damage, and legal expenses during a claim.

You get a no-claim bonus discount if you want to renew your vehicle insurance at the end of a policy period and are yet to face a claim. This reduces your business costs.

Commercial vehicle insurance also offers some relief to injured victims. Medical payments, in particular, lift the financial burden of medical expenses, allowing those injured to focus on getting better.

Final Thoughts

When purchasing a commercial auto policy for your business autos, compare commercial auto insurance quotes from multiple providers. You’ll find a good insurance company with the most competitive rates this way.

You should get help from a qualified insurance agent. They’ll evaluate your business’s needs, type of business autos, and frequency of use, among other factors, to help you to help you afford optimal coverage. The best agent can also guide you step-by-step through the claims process whenever an accident occurs.

For more information on commercial vehicle insurance coverage options and their costs, hop over to Mission Financial Services and read our blog.

As a new commercial truck driver, it can be difficult to find good insurance coverage for your vehicle. Insurance companies often see new drivers as risky and only provide coverage to those who have been driving trucks for two or more years.

Additionally, the companies that do offer insurance for new drivers often charge high rates. This means you may end up paying two or three times more than experienced drivers. However, there are ways to find affordable insurance coverage if you know what type of coverage you need and how to search for cheaper options.

What Type of Coverage Do New Truck Drivers Need?

The type of commercial trucking insurance coverage you need as a new driver depends on the category of commercial truck drivers you belong to. There are two main categories of commercial truck drivers:

Company Drivers

Company drivers work for a trucking company as employees or independent contractors. You don’t need commercial trucking insurance if you’re a new truck driver directly employed by a trucking company. The company is responsible for insurance coverage.

However, you may need insurance coverage if you’re an independent truck driver working for a trucking business.

Owner-Operators

Owner-operators have their own trucking business and operate their commercial vehicles. There are two types of owner-operators: those who work under the authority of a motor carrier (leased owner-operators) and those who operate on their authority.

Leased Owner-operators

Leased owner-operators are covered by their motor carriers’ commercial truck insurance coverage.

Depending on the requirements of a motor carrier, an owner-operator with leased authority may need to purchase motor truck cargo or bobtail commercial truck insurance. If you fall under this category, read your lease agreement carefully to determine which additional insurance coverage you need.

Own Authority Owner-operators

Own authority owner-operators are solely responsible for purchasing all the mandatory commercial truck insurance policies they require to thrive. This includes some or all of the essential truck insurance coverage options outlined below.

What does Commercial Truck Insurance for New Drivers Cover?

Commercial auto policies for new drivers offer various essential and optional insurance coverage.

Essential Commercial Truck Insurance for New Drivers

Essential trucking insurance for new drivers is coverage all new truck drivers should consider to protect their ventures from significant financial losses. These coverage options include:

Trucking Primary Liability Coverage

Primary liability coverage is the minimum commercial truck insurance all trucking companies and owner-operators must have to operate in nearly all states. It includes bodily injury and physical damage coverage if you cause an accident. With a primary liability cover, your insurance company pays for the injured parties’ medical expenses and covers any damages to their vehicles.

Physical Damage Liability Insurance

Physical damage coverage protects your commercial trucks from all losses and damages they are exposed to on the road. Most commercial insurance companies offer this coverage in two parts:

Collision coverage: This insurance helps pay for repairing or replacing your vehicle if it is damaged in a collision with another vehicle or object.

Comprehensive coverage: This cover includes compensation for non-collision losses such as theft, fire, vandalism, and harsh weather conditions.

Unlike primary liability insurance, physical damage coverage is not required by law. However, it’s critical commercial truck insurance for new drivers as it protects the main asset, providing business security.

Non-Trucking Liability Insurance

Non-trucking liability coverage protects you if you get into an accident when driving your commercial truck for errands unrelated to work.

General Liability Insurance

Motor truck general liability insurance coverage pays for bodily injury and physical damages unrelated to driving your commercial truck but involving your business. This includes bodily injury compensation for accidents on your business property or those for-hire truckers caused away from your location.

Motor Truck Cargo Coverage

Motor truck cargo coverage protects the goods you haul. It’s an essential coverage option for most leased owner-operators as some motor carriers require truck drivers under their lease to carry cargo insurance.

Optional Commercial Truck Insurance For New Drivers

As a new driver, you should get more coverage to reduce risk and ensure you succeed. To do this, consider the following optional commercial truck insurance for new drivers:

Loss mitigation: Used to cover any losses that exceed your truck insurance policy limits.

GAP protection: GAP (Guaranteed Asset Protection) insurance is optional. This coverage covers any “gap” between the actual cash value of your vehicle at the time of loss and what you owe on your auto loan or lease.

How To Find Affordable Commercial Truck Insurance For New Drivers

There are three steps you can take to find affordable truck insurance for new drivers.

Step 1: Evaluate Your Business Needs

Evaluating your business needs will help you identify the coverage you need to avoid purchasing excess or unnecessary coverage. To do this, assess the common factors insurance providers use to set their commercial truck insurance premiums. These include your operating radius, vehicle and cargo type, FMCSA requirements, location, etc.

Step 2: Compare Quotes From Multiple Commercial Truck Insurance Companies

Get quotes from several commercial truck insurance companies and settle for one with high-quality coverage at an affordable rate.

Look at how the rates of different commercial truck insurance providers fare compared to the national average rates. Here’s a guide to help you understand the average commercial truck insurance cost for various coverage options.

Also, evaluate different commercial truck insurance companies based on their reputation, customer support, and availability to get the best insurance company.

You can get quotes from multiple commercial truck insurance providers at once through commercial trucking insurance brokers like Evolution Insurance Brokers.

Step 3: Negotiate Best Deal

Once you’ve identified the best commercial truck insurance providers, negotiate with each and settle for the best deal. Major insurance companies might be reluctant to offer discounts to new truck drivers, but it’s worth a try.

Final Thoughts

Getting the right commercial truck insurance policy gives you the financial stability and peace of mind you need to grow your venture. You might lose thousands to millions of dollars in settlement claims without insurance.

For additional peace of mind and security for your trucking business, we’ve partnered with TrüNorth™ to provide comprehensive commercial truck warranty protection. We can also help finance your commercial truck purchases to help you grow, even if you’re a first-time buyer. Contact us to learn more.