WEDNESDAY, JULY 29, 2020
 If you own a vehicle for your business, then you will likely have to buy commercial auto insurance. Your policy might offer you coverage to pay for damage the vehicle sustains in wrecks. Most policies call this coverage collision insurance. It’s important to have if you ever will need help with repairs when a wreck occurs.
Understanding Collision Insurance
Commercial vehicles are those that a business owns or uses for business purposes. Because the business owns the vehicle, the vehicle’s insurance needs are unique. Personal auto insurance policies won’t apply. Instead, a commercial auto policy will contain terms to address the business’s ownership stake.
Your policy will need specific coverage that protects your business when wrecks occur. You will, of course, need liability insurance in case of at-fault damage you cause to third parties. To repair your own vehicle, however, you might need collision insurance.
Collision insurance applies to damage done to your vehicle following a wreck. The policy can pay in two cases:
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When the vehicle sustains wreck damage, your insurer will calculate the necessary repair costs. It will then provide you a payment to help repair the vehicle.
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If the wreck causes your insurer to total the vehicle, then they will settle with you for the value of the vehicle. You can use the settlement to pay for a new vehicle.
You often use collision insurance if a wreck was your fault. Because you caused an accident, it is usually your responsibility to pay for the damage. Therefore, you will have to file against your own collision insurance for assistance.
The Limits of Collision Insurance
Collision insurance isn’t all-encompassing. Your policy might not cover certain damage in certain cases:
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Collision insurance is not mandatory for most commercial drivers. You might have to ask your agent to add it to your policy when you enroll.
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Policies will include deductibles. A deductible is a cost the insured must pay towards the cost of vehicle repairs. The insurer will subtract the cost of the deductible from your final settlement cost. So, you won’t receive a full payout for all damage costs.
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If the car is a total loss, then your insurer will likely pay you the cash value of the vehicle at the time of the wreck. Vehicles depreciate over time and use. Therefore, the settlement for a totaled vehicle might not be the cost you’ll have to pay for a new vehicle.
Keep in mind, you might have to list all vehicles owned by the businesses on the policy to insure them. Always tell your agent as you buy or sell commercial vehicles. Your collision coverage might need adjustments along with your overall policy.
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