When you use a vehicle as a component of your business, you usually need commercial auto insurance. This type of coverage minimizes risks associated with the vehicle and helps protect your business from claims. The same is true if you own or lease the vehicle. Here is some insight into leasing commercial vehicles.
Why Commercial Coverage Matters
As a consumer, leasing a vehicle is common. It helps keep costs down. Yet, you may know that leased vehicles must maintain full car insurance coverage under the terms of that lease. The same applies to commercially-leased vehicles. Any time you have a leased vehicle, the owner needs to know that the vehicle has proper coverage. It helps reduce their risk by loaning the car to you.
In the long term, the leasing company sets the coverage you obtain for a commercially leased vehicle. You can choose to add more protection above and beyond what they require. This may give you, for example, more protection from liability claims. However, a stipulation of most lease agreements is full coverage. This includes collision, liability, comprehensive, and uninsured motorist coverage, most of the time. You might also have to carry deductibles at certain limits.
Commercial or Personal Insurance?
The key concern many individuals have is whether they need commercial auto insurance. Generally speaking, any vehicle used for business operation should have commercial auto coverage. This includes any rented or leased vehicle. Here is why commercial auto stands out from personal auto coverage:
- It provides better liability coverage, to therefore better protect business assets. This extends the amount and type of protection you have to all company-owned vehicles listed.
- It can cover other types of vehicles and features. This includes trailers and other add-ons (if you mention them in the policy).
- It can cover more than one driver. The policy covers the vehicle no matter who is behind the wheel. However, you might need to list the driver on the policy. They should be able to drive any vehicle listed on the policy, too, however.
- Some policies also include non-owned vehicle coverage. This helps minimize risks to your company when employees operate vehicles the company does not own, like their personal cars.
- It’s very flexible to meet the demands of operation applying to your company.
When it comes to buying insurance for your vehicle, always turn to your agent. He or she can offer more insight into what specific coverage is right for you. This applies to leased as well as owned cars, trucks, and other vehicles. Take a look at your leased vehicle contract. Update your policy to match any requirements it has.
Also Read: The Line Between Commercial and Personal Auto Insurance is Thin