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Home » Collision Insurance Under Commercial Auto Coverage
June 30, 2021

Collision Insurance Under Commercial Auto Coverage

Vehicles owned by businesses must have commercial auto insurance in place. It is only this coverage that will provide the benefits necessary to help cover the company’s financial obligations if they ever face unexpected, unavoidable vehicle problems or damages. Among the multitude of problems that might cause a problem for business owners and their company vehicles is, of course, a collision.

When one of your company vehicles is involved in a collision, the costs of repairing or replacing the vehicle could become very expensive, very quickly. To safeguard your financial reserves against these significant costs, you should be able to rely on a benefit of your commercial auto coverage known as collision insurance. It’s an essential benefit to have if you value being able to cover your own costs in the event of accidents.

How Collision Insurance Helps Businesses

Collision insurance comes as part of your commercial auto policy’s physical damage coverage. It is designed specifically for the purpose of helping you make vehicle repairs when you strike another object while driving. It might apply in several situations:

  • Your business truck backs into a wall, creating damage to the rear of the vehicle. Your driver simply did not see the wall. 

  • Your driver is unable to stop in an accident on a roadway. He or she strikes another car. Collision insurance covers damage to your vehicle. Your liability insurance covers damage to another party’s vehicle. 

  • A vehicle tumbles down the side of the roadway because the driver did not park it properly. The damage is significant. The coverage applies here. 

Essentially, if damage occurs to your vehicle while you are driving it, then collision coverage will be able to step in. However, it does not cover vehicles when they are damaged by hazards like fires, severe weather, hail, flooding or vandalism. In this situation, separate physical damage benefits called comprehensive damage coverage will apply.

Do You Have Enough Coverage?

You naturally want your collision coverage to pay as much as possible for your vehicle’s damage following an accident. You also want to use it to pay for a new vehicle in case your present vehicle is totaled by an accident. In either case, you might not be compensated based on 100% of the value of the expenses.

  • Deductibles will apply to collision claims. If the cost of your damage falls below the value of your policy deductible, then your plan won’t even cover the cost of your claims. 

  • If a commercial vehicle is deemed a total loss following a wreck, your commercial auto policy will likely pay you based on either a vehicle’s actual cash value (its used value at the time of the wreck) or based on replacement cost value (the value of a like-new car). 

With commercial auto insurance, it is important to have very specific coverage to meet your needs. Take a closer look at what coverage is best for your company. Work with your agent to get a specific level of protection in place to minimize any risk.


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Categories: Auto Insurance

Tags: Collision insurance for commercial auto

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