Definition: A contract for an automobile in which one party agrees to pay for
another party's financial loss resulting from a specified event
(for example, a collision, theft or storm damage)
The same type of policy you purchase for your personal use is
also necessary for your business. If your business provides
employees with company cars, or if you have a delivery van, you
need to think about auto insurance. The good news here is that auto
insurance offers more of an opportunity to save money than most
other types of business insurance. The primary strategy is to
increase your deductible; then your premiums will decrease
accordingly. Make sure, however, that you can afford to pay the
deductibles should an accident happen. For additional savings,
remove the collision and comprehensive coverage from older vehicles
in your fleet.
Never cut corners on automotive liability coverage.
Minimal packages of 25/50/25 (per person bodily injury/total
accident coverage/property damage) are available; however, hitting
an expensive sports car can quickly wipe out the insurance
company's coverage. Pay the extra few dollars for higher coverage
of 100/300/100. Most states have laws concerning uninsured
motorists coverage. Supplement the standard auto policy, as the
costs are minimal.
As a businessperson, meetings and seminars may take you out
of town. The daily price of rental-car insurance for collision
has reached astronomical levels. The addition of a relatively
inexpensive endorsement to your company auto policy can save money
and prevent headaches on the road. This also gives you the
advantage of rate shopping with the major rental agencies. Without
this endorsement, the costs of collision damage waiver (CDW)
offered by the major car rental companies can tack on up to $10 per
day for car rentals. Failure to purchase the CDW results in the
renter carrying full responsibility for any damage to the car. Ask
your insurance carrier if this coverage is automatically included
or if there's an extra fee.
Most states have an insurance watchdog agency to oversee the
industry as a whole. They release comprehensive studies citing
rates for some typical drivers in average cars, driving safely for
a set number of miles. It will have information on the premiums
your state's insurance firms charge for the same standard and is an
excellent tool for determining the maximum coverage at the minimum
costs.