Beginner’s Guide to Types of Business Car Insurance Coverage

Having a car for your business can add a lot of benefits, i.e. it can reduce many overhead costs and increase the overall productivity of your business. However, if this is your first time to buy a car for business use, you must have to carefully go through several administrative procedures before you start to hit the road.

Such processes may, at times, be time-consuming, but will be crucial to help you in the event of unforeseen circumstances.

Aside from vehicle registration, one of the most important things you have to deal with is to choose the best car insurance plan for you. You need to take the proper steps to protect yourself in case of unintended circumstances like a car collision. With millions of road crashes happening every year, there is much reason for you to take extra precautions.

Though getting insurance may sound relatively simple, the process is not as easy as it seems and requires you to do your research. Insurance terms and plans may sound extremely technical and overwhelming if you are hearing them for the first time, but choosing the right plan will help you in the long run. To start, you can familiarize yourself with the most common types of car insurance coverage which might help you to zero down later on.

Auto Liability Insurance

Auto liability insurance serves as the bare minimum coverage to get permitted to drive. State laws typically have different standards for what minimum coverage may entail, but generally, liability insurance covers bodily injuries and property damages.

Bodily injury liability refers to the medical expenses from injuries sustained by another party in case you cause an accident. Similarly, property damage liability, helps you pay for costs needed to repair the other party’s property if you are at fault in an accident.

Comprehensive Insurance

Compared to auto liability insurance, comprehensive insurance has a much broader coverage that considers non-collision situations. It covers theft, vandalism, weather conditions, fire, glass damage, and other cases or types of damage that do not result from a car accident.

With this type of insurance, you can also get your car replaced or repaired if it gets stolen or damaged for reasons other than a collision.

Collision Insurance

As its name suggests, collision insurance helps you cover for your vehicular repair or replacement if it gets damaged from a collision with another vehicle or an object, or a single-car accident. However, it does not cover damage related to another party’s vehicle, medical bills, or damage caused by reasons other than driving.

In most cases, auto lenders require you to have both collision and comprehensive insurance to get broader coverage. With both types of insurance, you can be covered for both collisions and non-collision situations, thus making up one of the best car insurance options you can get.

The Bottom Line

Whether you would be driving the car yourself, or another staff member of your company would be doing so, you can never be too safe. Getting car insurance will keep you secure and protected in case anything happens so the effect of the damage is not as heavy for you.

Though the process is lengthy and time-consuming, there are many benefits to choosing the right insurance plan for you. If you are not sure of where to start, try asking insurance companies for recommendations based on how often you drive, where you usually drive, how much you can spend for the insurance, and others.