How To Choose The Right Vehicle Insurance For Your Business

Commercial vehicle insurance is often necessary if you own a vehicle that is used for business purposes. Unfortunately, it is often more expensive than personal vehicle insurance. However, there are ways to bring down the costs while still getting the appropriate coverage you need.

As with personal vehicle insurance, there are many different providers and policies out there to choose from. This post helps to outline some of the major considerations when choosing vehicle insurance for your business to help you choose the right cover. 

Do you need personal or commercial vehicle insurance?

Because personal vehicle insurance is cheaper, some people think that they can get away with using personal vehicle insurance on a business vehicle. However, this is illegal and could result in your cover becoming void if an insurer finds out.

If a vehicle is used for personal and business purposes, then you may be able to get away with personal vehicle insurance – providing that it is used predominantly for personal use. For example, if you mostly use a car for the school run and family holidays, but occasionally use it to meet clients, personal car insurance should be fine. 

However, if the vehicle is mostly used for business use, or is owned by your company, you must take out commercial vehicle insurance. For example, a car that you predominantly used as a taxi will need to be covered by commercial vehicle insurance, regardless of whether you use it for personal use on your days off. 

What type of vehicle are you insuring?

Commercial vehicle insurance can be taken out for a variety of different vehicles. Rates can vary depending on the type of vehicle.

Car

Commercial car insurance is necessary for any car used for business purposes. Taxis have some of the highest insurance rates of any type of car simply due to being driven more and therefore higher risk. In this case, you must take out a specialist type of commercial car insurance known as private taxi insurance.

Van

Vans cost more to insure than cars, because they are driven more than cars and often used to carry tools (which can increase the risk of theft). An older smaller van will cost less to insure than a newer larger van. 

Lorry

Many regular vehicle insurers won’t cover vehicles over 3.5 tonnes. In these cases, you have to consider specialist lorry insurance or HGV insurance. The larger and newer the lorry, the more it will cost to insure.

Other

Any business vehicle that is driven on public roads needs to be insured. This includes buses, tractors and loaders. If a vehicle is used solely on private land or transported to sites using another vehicle, it may not need to be insured. 

It’s worth noting that other vehicles like boats and helicopters can be insured too. In some cases, this may be mandatory (as is the case with helicopters) while in other cases it may be voluntary but recommended (as with commercial boats). 

What type of coverage do you need?

There are different types of policy you can take out to cover different risks. It’s important to carefully consider what level of cover you need. The common types of insurance include:

Third Party Only coverage

TPO coverage is the minimum level of insurance cover required in the US. If you get into an accident with another vehicle, TPO will pay for repairs to any damage caused to that other vehicle. It does not cover damage caused to your own vehicle. 

Third Party, Fire and Theft coverage

This covers the same eventualities as TPO, but also covers damage to your vehicle caused by a fire or vandalism, as well as covering you if your vehicle is stolen. 

Comprehensive coverage

Comprehensive coverage is the fullest coverage. It provides the same cover as TPFT, while also covering damage caused to your vehicle if you get in an accident (as opposed to just damage made to another vehicle).

Do you need cover for multiple vehicles?

If you own multiple vehicles that are used for business use, you may be able to take out multi-vehicle or fleet insurance to cover them all under one policy. This is less hassle than having to insure them individually, plus it is often much cheaper than taking out multiple individual policies. The size of your fleet and the types of vehicles you insure will determine the cost.

Do you need cover for multiple drivers?

Want to allow multiple drivers to drive a single vehicle? It’s possible to add second and third drivers to policies, however if more than three people are likely to use a vehicle you may be better off looking into options like comprehensive any driver van insurance. This covers any licensed driver who has your permission to drive the vehicle. This comes at an added cost, but is clearly much cheaper than having to buy separate vehicles for separate employees if only one of these vehicles is likely to be used at a time. 

Can you bundle your insurance with another form of insurance?

Insurance bundles allow you to combine different types of insurance policy. This can sometimes result in a discount. Multi cover car and home insurance is a popular personal insurance bundle – some insurers may offer a similar bundle for businesses that includes commercial property insurance and commercial vehicle insurance. Personalised bundles are another option that can allow you to pick and choose the different business policies you would like and pay for them all together each month. This could allow you to bundle commercial vehicle insurance with another policy like employers’ liability insurance or public liability insurance at a discounted rate. 

Do you need these insurance add-ons?

Insurance providers often try to upsell add-ons. These increase the cost of your insurance, but can be useful in some cases for covering extra eventualities. Some of the most popular add-ons that could be worth considering include:

Breakdown cover

This covers the cost of any roadside assistance or towing if your vehicle breaks down. With older vehicles, this can often be very useful. 

Legal protection

If a lawsuit is filed against your business after an incident involving your vehicle, legal protection can help to cover any legal costs. 

Personal injury cover

Personal injury cover can pay out compensation in the event that you or an employee is injured in a road accident. 

Hire vehicle cover

Hire vehicle cover is useful in the event that your vehicle is written off, stolen or needs repairs following an accident. It can pay for you to hire a vehicle temporarily until you’ve found a replacement/repaired your existing vehicle. 

How to choose an insurance provider

Different insurance providers will charge different rates. Therefore it’s important to spend time shopping around to get the best quote. There are a few ways in which you can go about choosing the right insurer. 

Use comparison sites

Comparison sites can help you quickly compare the rates of many different insurers. You can usually fill in a single form and the site will then help gather quotes from numerous providers. Be wary that not all insurers can be found on comparison sites. 

Talk to an insurance broker

By speaking to a broker, you can compare many quotes and create a more personalised insurance plan. Some private insurance brokers may be able to access exclusive deals that you cannot find on the market. That said, you should be wary of commission fees or extra fees for using their service. 

Look up the reputation of the insurer

It’s important to not just compare prices, but also reviews of insurers. This is particularly important when considering a smaller lesser-known insurance provider. Check reviews to make sure they are highly rated. Make sure there are no common complaints regarding making claims or hidden fees. 

What are some of the things that can affect your rates?

Commercial vehicle insurance rates are affected by many factors. When taking out insurance, it’s important to consider these factors, as there may be steps you can take to reduce your rates. Such factors include:

• The type of vehicle: A newer, larger and more valuable vehicle will usually cost more to insure.
• The level of coverage: The level of coverage you desire will also affect your rates with basic TPO insurance often costing less than comprehensive insurance. 
• Your driver history: The claims history, past criminal convictions and experience of a driver can all affect the rates you pay.
• The deductible amount: Opting for a larger deductible or excess amount will reduce the cost of your insurance. 
• Your business industry: Certain industries are seen as higher risk, and so you need to be careful what keywords you use when describing your business.
• Your parking location: Where you park your vehicle matters too – with secure off-road private parking greatly reducing your rates compared to parking on the curb. 
• Paying monthly vs paying annually: You’ll get a discount by paying annually instead of monthly. 
• Policy start date: Insurers will charge you more if you need cover that day, as they see you as desperate. Taking out insurance a week or two in advance of the start date can result in a big discount. 

Conclusion

There are many things to consider when choosing the right vehicle insurance for your business. Start by choosing the right vehicle and then carefully consider the level of cover you need. Take time to shop around for quotes and consider the small ways you may be able to reduce your rates such as increasing the deductible or delaying the policy start date for a week.