There are nearly 3.5 million businesses based in the state of California. They provide products and services in different industries and therefore have varying insurance coverage needs. Businesses that have company-owned cars or trucks, by law, must carry commercial auto insurance. Whether you own a manufacturing company like Kingston Technology, a transportation-based company like Crown Limousine or any other business that uses company-owned vehicles, you need the extra liability protection that an auto insurance policy can provide. Rates will vary from one insurance company to the next, so California business owners should compare a variety of commercial auto insurance quotes before selecting a policy.
California Motor Vehicle Crash Statistics, 2011
- In 2011, there were 159,115 motor vehicle accidents resulting in injuries in CA:
- Of these accidents, 5,155 involved trucks.
- In 2,257 of these accidents, a truck driver was at fault.
- That same year, there were 2,628 accidents resulting in fatalities:
- Of these accidents, 245 involved trucks.
- In 57 of these accidents, a truck driver was at fault.
- There is one major vehicular accident in this state every 3.25 minutes.
- Speeding is the number one cause of vehicular accidents in this state.
What Is Commercial Auto Insurance?
Commercial vehicles can range from passenger cars to tractor-trailers to construction vehicles. It makes no difference whether your company uses cars, trucks, vans or buses. If your company owns the vehicles, the company must cover the vehicles with commercial auto insurance.
Different types of vehicles will have different insurance coverage requirements as mandated by the state of California. For example, company cars have the same liability minimums as passenger cars, as follows:
- $15,000 for bodily injury per person
- $30,000 for bodily injury per accident involving two or more injured parties
- $5,000 in property damage coverage per accident
But, large commercial trucks and vehicles such as buses, semi-trucks and construction vehicles generally have much higher liability insurance requirements, as determined by these factors:
- The size and weight of the vehicle
- The type of cargo the vehicle will transport (trucks that haul hazardous materials will have higher liability requirements)
- The vehicle's intended use (e.g., deliveries, interstate commerce, construction, transportation)
- The vehicle's passenger capacity if the vehicle will be used to transport passengers
If you are uncertain about how much liability insurance coverage you must carry for your particular company vehicle or fleet of vehicles, you should speak with a local insurance professional who is familiar with commercial auto insurance requirements in California.
How Costly Are Motor Vehicle Collisions?
In 2011, the National Safety Council issued a report in which they revealed the average liability costs for traffic accidents across the country. These figures may give you an indication of how much your company could be liable for if one of your drivers causes a serious vehicular accident:
- Fatalities result in an average of $1,420,000 in liability costs.
- Incapacitating injuries result in an average of $70,500 in liability costs.
- Non-incapacitating injuries result in an average of $22,700 in liability costs.
- Property-damage only collisions average about $9,100 in liability costs.
- In California, motor vehicle collisions result in approximately $4.16 billion in costs each year, as follows:
- $40 million in medical costs
- $4.12 billion in work loss costs
It is important to bear in mind that when a company, rather than an individual, owns the vehicle that causes an accident, injured parties tend to pursue higher amounts in damages and juries tend to be more generous with their awards to the plaintiffs.
What Does Commercial Auto Insurance Cover in CA?
Commercial auto insurance policies have a number of coverage options. Of these, only liability coverage is mandatory. Because a collision involving a company-owned vehicle has the potential to cause significant financial repercussions, it is a good idea to purchase as much coverage as your business can reasonably afford. Coverage options include the following:
- Liability coverage: This covers liability costs if you or one of your drivers is responsible for third-party property damage or injuries while operating a company-owned vehicle. It can also cover court costs and legal defense fees up to your coverage limit.
- Medical payments coverage: This covers the cost of necessary medical treatment if your driver or any authorized passengers suffer injuries in a vehicular collision while in your company-owned car, regardless of fault.
- Collision coverage: This compensates you for the costs associated with the repair or replacement of your company vehicle if it sustains collision-related damage, regardless of fault.
- Comprehensive coverage: This compensates you for the costs associated with the repair or replacement of your company vehicle if it sustains damage in a non-collision-related event such as vandalism, theft, falling objects, flood or fire.
- For-hire (or non-owned vehicle) coverage: This provides extra liability coverage for your employees’ personal vehicles when they use the vehicles for company-related business.
- Bobtail coverage: This covers tractors when you operate them without a trailer in tow. This coverage is typically valid any time that the vehicle is in use, even if for non-work-related purposes.
- Loading and unloading coverage: This provides coverage for products, merchandise, equipment or materials in the event that loading or unloading them for purposes of transport results in their damage.
- Uninsured/Underinsured motorist insurance: This covers the costs associated with personal injuries and property damage to your company vehicle if the responsible party lacks the necessary insurance to cover the damage adequately.
- Towing and labor coverage: This covers the specialized roadside assistance that may be necessary if your company-owned vehicle becomes inoperable while on the road.
Not all companies will need to purchase the same coverage options. For example, a pizza shop with a fleet of delivery vehicles will not need bobtail insurance, while a manufacturing company that only uses company-owned vehicles will not need non-owned vehicle coverage.
Get a Variety of Commercial Auto Insurance Quotes in California
You can customize a commercial auto insurance policy to meet your specific business needs. When shopping for quotes, you may find it beneficial to ask for help from an insurance agent in the Trusted Choice® network. These independent agents can answer your insurance-related questions, help you assess your coverage needs and obtain a variety of competitively priced commercial auto policies for your review.
Trusted Choice agents have offices throughout the state, so you should be able to find one located conveniently close to your home or business. Contact a local agent for more information so you can start comparing commercial auto insurance quotes in California.