A variety of trends have contributed to the rise of commercial auto losses. These trends have contributed to a different market for buyers of commercial auto insurance. Here is a look at the most significant factors driving commercial auto losses across the country.
More vehicles on the road-A record number of vehicles on the road means more traffic and congestion, which increases the risk of collisions.
Distracted driving- Today’s drivers face more distractions than ever before. Distracted driving can reduce awareness, decision-making, and performance which can result in an accident.
Driver shortage- A shortage of experienced commercial drivers has caused employers to hire people with less experience. Newer drivers are more likely to get into accidents.
Litigation trends- Lawyers are getting involved in more and more auto claims. This litigation drives the cost of claims. What’s more, trial verdicts related to motor vehicle crashes can be as much as six figures.
Rising medical costs- Medical costs continue to rise. As a result, many injuries caused by auto incidents exceed coverage limits.
Increased vehicle repair costs- While technological advancements have made vehicles safer and more efficient, they also increase vehicle repair costs.
Contact Midwest Insurance Group today at 262-646-5777 for more recommendations for employers to reduce the risk associated with commercial vehicle fleets as well as insurance options.
For small business owners, the line between the personal and their business can be a bit hazy at times. Yet, when it comes to a vehicle that may be used for personal and business-related reasons, it’s important to know how your auto insurer is expected to define what constitutes commercial use.
If you own a car and cover it under a personal auto insurance policy, an insurance company may not pay claims for any damages you incur if the insurance company deems that it was used as a commercial vehicle. For example, if your car is used for rideshare purposes, it may be considered a commercial vehicle when it’s in use.
Not being on the same page with your insurance carrier may result in financial losses, so it pays to ask yourself important questions about your vehicle’s use in order to select the right policy for your car.
The key distinction for determining if a personally owned car may need commercial auto insurance coverage is whether the vehicle is used for any business-related purpose.
Defining Business-Related Purpose
Your auto may be defined as a commercial vehicle if you use your vehicle to:
- pick up or deliver any goods
- provide a service for a fee
- travel to a remote work location or between work locations
- visit client locations.
Additional conditions under which your car may be defined as a commercial vehicle include:
- the owner named on the vehicle title is a business—incorporated, unincorporated, or LLC
- the vehicle is rented or leased by others
- the vehicle is equipped with a snowplow, has an altered suspension system or other equipment or modification
- the vehicle is driven by you or your employees for both business and personal use on a consistent basis
If you use your personal vehicle for business reasons only occasionally, it may be covered under your personal policy, but you may need to indicate that on your application for auto insurance.
The wisest course of action is to describe how you expect to use your vehicle for personal and business purposes and let your insurance agent guide you to the most appropriate policy for your situation. Contact Midwest Insurance Group at 262-646-5777