Commercial auto insurance comes into picture when it is not your domestic vehicle that you are insuring but the vehicles you use as part of your business. Commercial auto insurance is a slightly more complicated proposition than the case of domestic vehicles as a whole lot of new factors get involved in the former case. Hence the range of negotiation is larger; the number of factors is more and most importantly the amount of money involved is also higher. Hence one must be careful while choosing commercial auto insurance.
The first thing to realize about commercial auto insurance is that invariably not one vehicle but an entire fleet consisting of several vehicles is involved. This means a very good business opportunity for the insurance company. At the same time it represents a good amount of risk too. Hence there are pros and cons for either party which needs to be considered before one arrives at the final insurance.
It is always more useful and economical if a company and the insurance provider have good friendly terms as they need to do business together hopefully for a long time. This means insurance providers should be able to provide total value for money to the company through services, the right policies, expertise and also the maximum possible discounts. The company using the services of the insurance provider should eb able to notch up some discount on the basis of the number of vehicles and the types of insurance that include probably comprehensive coverage of all vehicles, liability insurance and also medical insurance of the passengers.
Medical insurance of the passengers is mandatory as the fleet of vehicles used for business purpose are likely to be used regularly by many employees, in which case there has to be insurance meaning more business for the insurance provider. The discounts given on the policies are based on many factors. The area in which the office is located and the vehicles will travel will influence the premium as the location is related to the probability of theft and accidents. Also the profile of the drivers and how safe they are will determine the insurance premium. At this juncture, companies can go for coverage for all drivers or go with individual policies depending on which ever seems to be the better option.
A company has to look at the premium as a monthly expenditure or investment. One way to reduce it is to invest some amount on making the cars safer through navigation systems, monitoring systems and anti-theft mechanisms which will come good in the longer term. Fancy cars lead to higher premium while the normal sedans lead to smaller premiums which is why the fleet should consists of a greater number of sedans than the high end sports cars.
A company should also decide whether to go for a lower deductible and higher premium or vice versa. Lower deductible means that you need to pay a lesser part of the final damages if any with greater monthly premiums. This is a better option for commercial vehicles as you are know exactly what your expenditure every month is going to be unlike the case of higher deductible where the final amount you pay for the damages to your fleet might be very high which cannot be predicted.