For companies that use vehicles on a regular or daily basis, there is a need to have the business insurance known as Commercial Auto (CA) coverage to cover them in the event of an accident or theft that puts their company cars or trucks out of service temporarily, or even permanently. There are many factors that help with deciding the insurance rates for different businesses, based on how vehicles are used, and this article will discuss a few ways in which this is accomplished.
Companies use a commercial auto rating system to determine premiums that businesses will pay for auto coverage. Many factors go into determining what those rates will be depending on the type of business and the ways in which company vehicles are used.
The rating structure is determined by usage
For example, if you were in the delivery business you would be paying a different premium than someone who uses a company vehicle to make sales calls. Furthermore, someone in the flower delivery business would have a different rate from someone who delivers airplane parts. A company that transports goods across several states would certainly expect to pay different rates than a company that does all of their business intrastate.
You can see there are many variables that go into determining the rates based on vehicle usage, miles driven, types of vehicles in use, and the list goes on. Companies have to sort through the data to help them decide what rates to charge, and to come up with a fair evaluation based on the information obtained.
You may have only one or two cars that you use strictly for business, or you may have a whole fleet of trucks at your disposal. Because employees who drive these vehicles have to be covered as well, this will all factor into how the commercial auto rating system determines the proper premiums for each individual business.