MONDAY, JANUARY 25, 2021
Why You Need Collision Insurance on a Commercial Auto Policy
Commercial auto insurance is a very diverse and flexible benefit that you can customize to your advantage, including by adding coverage for damage caused by collisions. For any company that owns a vehicle, collision coverage is an essential tool they can use to protect both their vehicles and their own bank accounts. All in all, it makes sure you can afford to repair or replace a damaged item that your business has invested a lot of money in.
Let’s take a closer look at how it works.
What is collision insurance?
All vehicles (commercial and private) are subject to damage risks. One of the most obvious causes of vehicle damage is a collision with another vehicle or object. Whether you hit another car or back into a building when trying to leave a parking space, the damage to the car could still be severe.
If it is a company-owned vehicle sustains damage, then it is the business that has to face the music. The company owns the car, and the company is responsible for maintaining it. Collision insurance is the portion of your commercial auto policy that will help you make the necessary repairs to the vehicle, or else help you pay towards replacing it altogether.
How will it pay me for vehicle damage?
Collision coverage will make sure you receive some form of compensation for any wreck damage that your vehicle sustains. There will be limits attached, however:
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A deductible will apply to most collision claims, and any damage cost that falls below your deductible value will not be paid by your insurer. As a result, you must choose a deductible that will be paid out of pocket.
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If a company car is totaled in an accident, then your policy will pay you based on your car’s actual cash value at the time of the loss. This is not the car’s like-new value, but rather its used value. Therefore, you won’t receive 100% of the cost necessary to buy an entirely new car.
Because of conditions like these, it’s important to speak to your commercial auto insurance agent about how best to structure your plan at the time you enroll. They will ensure that you never lack coverage your critically need,
Why do I need this coverage?
If one of your employee drivers wrecks one of your company cars, then you will naturally have to pay for the damage. Rather than forcing you to pay for these losses out of your own accounts, collision insurance will help supplement the necessary costs. Therefore, you won’t have to bear this entire burden yourself. All in all, you should consider collision insurance an essential part of your overall commercial auto policy portfolio.
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