What is Business Car Insurance, and When is it Required?

In 2018 there were about 12 million vehicles involved in crashes in the U.S. and 6.7 million were passenger cars in traffic crashes.

When you are on the road, accidents happen even if you are a safe driver. It could be your employee delivering some goods to a client. Along the way, another car ends up rear-ending your company car resulting in severe damage and both drivers were brought to the hospital.

A business car insurance policy will help deal with the expenses for the property damages and medical bills. Without coverage, your business will be liable for all the costs.

As a business owner, it is wise to provide some insurance coverage for cars, vans, or other vehicles needed for your business. The most commonly used contracts are the Business Auto Coverage Form (BACF). You can be selective in your coverages depending on the use and the features of the vehicles.

How Does Business Car Insurance Work?

A personal auto insurance policy will cover some use of your vehicle for business purposes and so does your employees’ personal auto insurance coverages who use their own vehicles to perform duties for your company’s benefit.

In case of an accident, the insurer will only cover damages up to the policy limit of your employees’ personal auto insurance contracts. Any excess will be shouldered by the business. 

A personal auto policy is not enough to cover an accident resulting in multiple injuries and damage to properties. Victims may resort to filing lawsuits to recover damages from your business.

Protect your business and your employees by getting a business car insurance policy to cover medical expenses and property damage in a road mishap. Fret not, about expenses, whether you or your employee is at fault, even in a fatal accident.

The premium for a commercial auto insurance policy is quite pricey; don’t get enticed in enrolling in a standard cover if the vehicle is used mainly for business.  Your auto policy might get canceled. Cars, trucks, or other vehicles that you use for the business should be covered by business vehicle insurance policies.

Auto business insurance policies vary from state-to-state and depend on the coverage you need for it. There are policies that cover the main driver with an option to include a spouse such as a salesperson. Some policies will include all drivers and others will cover commercial travel for people whose livelihood is driving.

When Do I Need Business Car Insurance?

Business car insurance is required if you use your car or you own a fleet of vehicles for business purposes. If you’re still apprehensive, use this guideline to determine if you need a business car insurance policy.

  • Transport or deliver products, supplies, or stock.
  • Moving equipment or tools.
  • Transport passengers.
  • Employees operate a vehicle owned by a company. 
  • Vehicle is exclusively utilized for business.
  • Used for other services such as training drivers.
  • Vehicle is rented.

Business people will have a load off their minds with business car insurance policies for their company’s vehicles. Accidents cannot be avoided when on the road and when it happens, your insurer will cover damage to your vehicle and others’ property; injury to the driver and other parties.

What Type of Insurance is Required to Drive for Uber?

Uber is popular among people wanting to side hustle for some extra dollars. You might be one of those, and you’re wondering about the car insurance coverage and who will shoulder the costs in case of an accident.

Uber got their driver-partner covered by an insurance policy while they are logged on to the Uber app. But you have to keep an auto accident insurance that meets your state’s minimum financial obligation in case of an accident when your Uber app is turned-off

Your personal auto insurance is void while driving for Uber since policies exclude driving-for- hire.

Uber insurance coverage

The driver and riders are covered by Uber insurance once the app is tapped to Go while waiting for a rider up to drop-off. Here are the stages of the insurance coverage

App off

When the driver has not turned on the app, the expenses for any accident will be covered by your personal auto insurance policy. 

Online

Once the driver is available and goes online Uber supports you with third-party liability coverage in case of an accident.

  • $50,000 bodily injury per person.
  • $100,000 bodily injury per accident.
  • $25,000 property damage per accident.

Accept trip

The moment the driver accepts a trip and met an accident while on the way to pick-up the passenger or on a trip with the passenger the following Uber insurance applies.

Third-party liability coverage

At least $1,000,000 depending on the state for bodily injuries to your riders, persons on other vehicles, pedestrians, or property damages.

Uninsured or underinsured motorist bodily injury coverage

At least $250,000 depending on the state. In case of an accident caused by another driver who is underinsured, you and your passengers are covered by an Uber insurance. This also applies to hit-and-run cases where the erring driver cannot be recognized.

Contingent comprehensive and collision coverage

Your personal auto insurance should include comprehensive and collision coverage for Uber’s insurance to get going. The insurance will cover physical damage up to its actual cash value, no matter who is responsible. You have to pay a $1,000 comprehensive and collision deductible before the insurance kicks in.

How Much Does TLC Insurance Cost in NYC?

In the NYC area, the New York City Taxi & Limousine Commission (NY TLC) controls and licenses all taxis and For-Hire Vehicles (FHV). Drivers are required to get a TLC license and insurance which carries a minimum level of liability coverage. Personal auto insurance is invalidated when the vehicle is used commercially. 

A TLC commercial insurance provides coverage for other persons and their property but not damage to your own vehicle. Without extra collision insurance, you will be paying for costly repairs. In the absence of TLC insurance, you are at risk of getting your TLC registration canceled for a month. 

What is the minimum TLC insurance coverage?

The minimum coverage for a TLC vehicle of 1-8 seats is as follows:

COVERAGEMINIMUM LEVEL
Liability coverage per person$100,000
Liability coverage per accident$300,000
Personal injury protection (PIP)$200,000
Property damage$10,000
Collision protectionVoluntary

What is the cost of TLC insurance?

There is no fixed rate for TLC insurance. A 25-year old driver with three years of driving experience and a clean record typically pays around $3,000 – $4,500 a year. A newbie and youthful driver with a tainted history will pay around $10,000. Usually, the cost can be paid in monthly installments.

The premium of a TLC insurance is computed based on the following:

  • Driving record
  • Vehicle history
  • Number of years as a commercial driver
  • Claims record
  • Police history
  • Citation history
  • Vehicle details
  • Driver’s age
  • Additional driving training or safety measures

BIO

Oscar Park is a writer with 4 years of experience within the auto and business insurance industry, and with product knowledge and understanding in the everyday changing market. Currently, he is a member of the marketing team at Uber Insurance. When not writing, Oscar spends most of his time reading, cooking, traveling the world, and catching his favorite jazz shows.