I’ve had the pleasure of working with a number of Dallas / Fort Worth area business owners with their commercial car and truck insurance. We’ve written cars, pickup trucks, cherry pickers, and even cement mixers. It’s always interesting to determine what insurance company will provide the best coverage and the best rate.
Most small business owners don’t want to pay more than needed to insure their commercial cars and trucks, but neither do they want poor coverage that won’t protect them or their businesses if something goes wrong. Invariably, this part of the discussion is where we identify the factors that impact their commercial vehicle insurance rate.
There are at least 8 factors that come up in every discussion including:
- Vehicle type
- Vehicle value
- Customization
- Vehicle location / storage
- Driving activity
- Driving area
- Other insurance
- Credit
Commercial vehicles come in all shapes and sizes. Just drive down LBJ or Central Expressway and count the different types of vehicles you see. There are cars, vans, step vans, pickup trucks, box trucks, cement mixers, semi tractors, and much more. Different vehicles are given different base rates.
Once the vehicle type is determined, the base rate is partly determined by its value. Regardless of the vehicle’s age, the value is determined by what it’s worth and partly what it would cost to replace it if it’s new(er). To that we add the value of any customization that’s been performed. This can include ladders, tool boxes, racks for ladders and tools, lift gates, ramps, paint jobs, etc. Each of these items adds to the total insurable value.
Where the vehicle is located and how it’s stored when not in use also impacts the rate. Vehicles parked on an open lot are charged more than cars and trucks are parked in a locked and fenced yard; those locked in a garage pay even less.
Just like your personal insurance, driving activity does impact your commercial car and truck insurance rate. If you or one of your drivers has had a ticket or accident, even in their personal vehicle, this will increase your commercial rate. I’ve heard of one driver who was terminated because of his impact on the owner’s commercial insurance rate.
How far you drive your cars and trucks has an impact on your rate. If your driving is restricted to the Dallas / Fort Worth area, then a daily driving radius of 50 miles is appropriate, and that will net a lower rate than someone running trips to Houston, San Antonio, Austin, etc. The bigger the service area, the higher the rate and conversely, the smaller the service area, the lower the rate.
The presence of commercial general liability can also net you a discount on your commercial car and truck insurance. All commercial car and truck insurance companies don’t want to be the only liability insurance your business has which is why a discount for general and professional liability is offered.
The company’s and / or business owner’s credit history also impacts the commercial vehicle rate. Companies and owners with good credit pay less for their commercial car and truck policies while those with less stellar credit pay more. In addition to insurance companies looking at credit as a predictor of future claims, they want to make sure they are partnering with someone who’ll pay their bill, on time, which is not any different than those of us who own a business.
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