Commercial Auto Insurance California

Commercial Auto Insurance in California: What You Need to Know

The state of California has nearly 1.8 million businesses. Most provide services or products in various industries and have specific insurance coverage needs. Companies that have business-owned cars, by law, must get commercial auto insurance. 

Whatever your business is, its industry, and the company size, as long as you utilize company-owned vehicles, auto insurance is needed for extra liability protection. The insurance rate may vary from one insurer to the next, so business owners living in California should try to compare and look for various choices when it comes to commercial auto insurance quotes.

Today, most insurance companies use an independent specialist matching system to get an appropriate insurance plan for their location. All you have to do is be specific with what you are looking for, and this latest technology will suggest the best insurance agency or representatives for you. Here’s everything you need to know about commercial auto insurance in California. 

Three different types of vehicles parked in the road in California.

What Is Commercial Auto Insurance?

Commercial vehicles include tractor-trailers, construction vehicles, and passenger cars. It doesn’t matter whether your company uses trucks, vans, buses, or cars. If the company owns one of these vehicles, its vehicles must be covered with commercial auto insurance.

California Car Insurance Minimums

Of course, insurance coverage requirements for different types of vehicles will be different as the state of California law mandates. For instance, passenger cars have the same liability minimums as company cars:

  • $35,000 for bodily injury in every accident involving two or more injured individuals
  • $20,000 for bodily injury per person
  • $10,000 in property damage coverage in every accident

Also, large commercial trucks, construction vehicles, semi-trucks, and buses have higher liability insurance requirements, based on the factors below.

  • The type of cargo the vehicle will transport
  • The weight and size of the vehicle
  • The vehicle’s passenger capacity if it will be used to transport passengers
  • The vehicle’s intended use, such as construction, deliveries, transportation, or interstate commerce

If you’re unsure about the type of liability insurance coverage to carry for your company vehicle, consider getting local insurance professionals. Communicating with them about California commercial auto insurance requirements will get you a higher chance of acquiring better coverage.

Why Businesses Need California Commercial Auto Insurance

If a vehicle is used in jobs related to the person’s occupation, business, or profession, other than using it for commuting, commercial auto insurance is needed.

  • If you need higher limits of liability because of the kind of job you have, a commercial vehicle insurance policy may be appropriate.
  • If you are going to use a vehicle to transport people or goods for a fee or use it to perform any industry service, a commercial insurance policy for your vehicle is a must.
  • If an employee operates the vehicle or an auto’s ownership is under the name of a partnership or corporation, an insurance commercial auto policy may be needed.
  • Towing a trailer or hauling weight in equipment or tools to conduct your business services may also require business insurance policies for a commercial vehicle.

Three Things At Risk Without Commercial Auto Insurance

  • None or limited coverage for accidents while handling vehicles for business.
  • Paying out expenses, specifically for medical payments, injuries, repairs, and more.
  • Losing control of your personal or company insurance car coverage.

Commercial Auto Insurance Coverage In California

There are a lot of coverage options for every commercial car insurance policy, but only liability coverage is mandatory for businesses in California. Since a collision can happen to any company-owned car, it has the potential to result in large financial repercussions. It would be best to buy as much coverage as your company can afford. Below are the following coverage options to consider.

Liability Coverage

This coverage provides liability costs if the business owner or the driver is responsible for any injuries or property damage while using a company-owned car. It will cover the legal defense fees and court costs up to the coverage limits.

Liability coverage is required in most US states and is considered the foundation of a commercial insurance auto policy. If an accident happens and you are at fault, this coverage will pay for the property damage expenses and bodily injury caused to third parties. It will also pay for the legal bills, medical payments, and lost wages of the injured parties. When it comes to property damage, this coverage will pay for replacing and repairing things that are wrecked. In some instances, the third party may sue you so they can demand ‘pain and suffering damages.

Collision Coverage

Regardless of fault, collision coverage will compensate for the amount associated with the replacement or repair of your business vehicle under collision-related damages.

Usually, you can’t collect any actual amount for the cash value of your car. It is not the same as the vehicle’s repair and replacement cost. Normally, collision coverage is the most expensive component of vehicle insurance. You can retain your premium amount down by acquiring a higher deductible, like $300 or even $600. But, remember that you should pay the price of your deductibles before the business insurance company requires cash after the accident. An insurance company will get the total payment for your business car repairs and assess if the company will pay an excessive amount compared to the vehicle’s worth.

Medical Expenses and Payments Coverage

This company insurance for vehicles covers the cost of medical expenses if an authorized driver or passenger suffers severe injuries in an auto collision. It only applies if the vehicle is business owned, regardless of fault.

After a vehicle-related collision, the expenses can arise from any accidents while driving your vehicle, driving someone’s car, and from the injuries, you and any of your passengers will incur. Medical payment coverage will compensate regardless of who’s at fault. But in some instances, if there is someone liable for the accident, your business insurance company may advise recouping the payments from them.

Comprehensive Insurance Coverage

It pays you for any amount associated with major replacement or repair of your business vehicle that damages non-collision and non-related events like theft, fire, falling objects, flood, or vandalism. This coverage comes with deductibles, and the carrier will pay for the amount of the car’s worth at the time of damage.

Bobtail Coverage

Bobtail coverage will cover the tractors when you use them without towing the trailer. Typically, the coverage is valid when the vehicle is used for work or non-work-related reasons.

Loading and Unloading Coverage

It provides coverage for merchandise, equipment, materials, or products while loading or unloading these items for transport purposes and resulting in damages.

Labor and Towing Coverage

This business insurance coverage for cars is specific for roadside assistance needed if your business-owned or even non-owned vehicle becomes non-operational while it’s on the road. 

This coverage option is not required for all companies, so they don’t need to purchase it. For instance, a pizza restaurant using a delivery vehicle doesn’t need to acquire labor and towing insurance. On the other hand, the manufacturing business industry that utilizes company-owned cars doesn’t need non-owned auto coverage.

Uninsured/Underinsured Motorist Insurance

This business car insurance coverage covers the amount associated with property damage and personal injuries to your company car if the responsible individual lacks insurance to cover the damages.

UIM or underinsured motorist coverage will compensate if the driver who causes the hit causes more damage than their liability coverage. In other states, UIM or UM coverage will pay for the property damage caused by the accident. Regardless of the driver’s nationality, given the uninsured party’s prevalence, this coverage is vital. This insurance costs less than $50 a year for $110,000 worth on the average note. It will compensate for anything that any medical insurance does not cover.

How Much Does Commercial Auto Insurance in California Cost?

On average, drivers in California pay $2,065 per year for their car insurance costs. The price of the premium varies based on several factors, including: 

  • The type of car you drive
  • The motor vehicle record
  • Claims history
  • How many miles you drive per year

Finally, to meet your specific business needs, you are allowed to customize your commercial auto insurance policy. When looking for better quotes, it would be an advantage if you ask for advice and help from a reliable and trusted insurance specialist in California such as East Insurance Group. We offer our insurance services in many cities in California, including San Diego, Los Angeles, Fresno, Sacramento, and San Jose. 

Our professional representatives can provide excellent answers to your insurance-related questions. We can evaluate your coverage needs and get various competitive pricing for quality commercial auto policies. Connect with EIG today.

Did you like this article? If you did, make sure you also read more about business insurance in California.