Commercial auto insurance is something that is way different from conventional auto insurance. There are a lot of factors which differ and hence result in a widely different cost range.
Commercial auto insurance is required for people who are using vehicles for any purpose other than personal use. We shall now see a couple of examples where commercial auto insurance could be used.
A lawn mowing company would use various kinds of lawn mowing vehicles. This could include small scale one-man vehicles or even larger tractors which would be used for landscaping and agriculture. It has to be noted though that these vehicles will not be used during the harsh wintry months of November or December. And hence there would be a certain idle time associated with the use of these vehicles. We shall deal in more detail with this later on in the article.
Another example of a commercial use vehicle would be snow ploughs which are used to remove snow from the sidewalk or the roads. These vehicles are very much in need in most of the north east and the North West including the central corridor of the country. And again they have a seasonal use. They will not be necessary more than 6 months or so in a year.
And then there are tourist vehicles. These could include buses, cars and even trucks. And the seasons are a bit more complicated when it comes to tourism. Because it more or less depends on what the tourists are looking for in a tourist destination. A place like New York City could have visitors all year round. But a place like the yellow stone national park would have visitors during the warm months of august or September. And it is the same with beach resorts. They are more or less vacant during the cold months of winter.
So isn’t it going to be a waste of money to keep your vehicle insured even during the off season? And considering that commercial auto insurance is that much more expensive than conventional auto insurance, it doesn’t make sense to keep it going through the off season.
Hence there is a mechanism to reduce your coverage during the off season. This way you can opt only for that part of the coverage that you require and you can do away with the unnecessary parts. So what would these parts be?
If your vehicle is just going to be parked in the garage, you would not require collision coverage. All you would require is your fire and theft policy. This way you will be covered against losses sustained due to robbery and acts of vandalism. You will also be covered against damages due to fires, floods, tornadoes, earthquakes and other natural disasters. Even a branch of a tree falling on your vehicle could cause extensive damage and hence your vehicle needs to be covered continuously.
Besides it is also illegal to break your insurance policy for more than a year. You will be blacklisted by the DMV or department of motor vehicles and might have to pay a hefty fine to get insured again. And more than being illegal, it is not good practice to have your vehicle uninsured for any period of time. this can result in serious losses and might even ruin your business financially.
