A Quick Guide to North Carolina Commercial Auto Insurance

North Carolina is a state with nearly a million small businesses. Every owner must consider commercial auto insurance if their companies use vehicles for work. Finding the right insurer for your business needs is the first step. The next step is to work with your insurer to customize a plan that makes sense for your operation. Here’s what you need to know about North Carolina commercial auto insurance.

What Does NC Business Auto Insurance Cover?

The type of business you run will be a significant factor in the full amount of coverage you need. For basic coverage, an NC business auto insurance policy usually offers the following:

  • Liability – covers damage and injuries you cause to other people
  • Bodily injury – pays for the victim’s hospitalization and medical treatment
  • Property damage – repairs or replaces damage you cause to others’ property
  • Uninsured motorist – covers costs when the at-fault driver has no insurance
  • Hired auto – coverage for rented or leased vehicles
  • Non-owned coverage – coverage for employees using personal vehicles for business
  • Any auto – can be used for any driver using a company vehicle

North Carolina Commercial Auto Insurance Requirements

Like most states, North Carolina has two major insurance requirements for businesses. You need workers’ comp if your firm hires one or more employees, and you need commercial auto coverage if your company owns vehicles. The state requires that your business carries the following minimum liability coverage:

  • $30,000 per person injured in an accident
  • $60,000 per accident for bodily injury
  • $25,000 for property damage

Since all states are different, it is crucial to understand NC’s auto insurance laws before relocating your business here. A further requirement is that all commercial drivers in the state must carry uninsured/underinsured coverage at least equal to the top liability limit for any vehicle of your fleet covered by the policy.

All other types of business insurance in the state are optional, but your lender may have additional requirements. The specific coverage limits you need are up to you based on how you manage risks, the number of vehicles, and your budget for insurance.

Optional Coverages Available for Businesses in NC

  • Collision refers to damage to your vehicle caused by another driver or obstacle in the roadway. Collision coverage pays either your vehicles’ actual cash value (ACV) or the repair bill (whichever is lower). While collision coverage is optional, it is typically required by established lenders.
  • Towing coverage is certainly an important option to consider for the sake of avoiding a driver getting stuck in a truck roadside. Breakdowns are more likely to occur during long journeys.
  • Another common option is comprehensive coverage, which pays for disasters caused by events other than traffic collisions such as fire or theft.

A less talked about option if you don’t want to pay an insurance agency is to use your own cash by purchasing a surety bond that meets the state’s requirements for minimum commercial auto coverage. Most small business startups, however, do not have sufficient investment capital to go this route.

Cost of Coverage

The costs for North Carolina commercial auto insurance vary depending on the business model. A small company with one vehicle will play much less insurance than a large corporation with a fleet of vehicles. The more your drivers are on the road, the higher the costs will be.

The driving records of your employees who use your vehicles will be another crucial factor. As everyone knows, accidents and speeding tickets push insurance rates higher.  Other key factors that affect auto insurance rates include the type of vehicle(s), your business location, and the number of driving miles.

Discount Options

You can get deals on NC business auto insurance mainly by talking with your insurer and asking questions about policy options. Many insurers offer discounts they don’t advertise – you may have to ask about strategies for reducing your monthly costs. One option is to bundle your auto coverage with all your other insurance, as many insurers offer broad types of coverage.

If your company has never filed an auto insurance claim before, that’s good news for keeping your rates as low as possible. However, if your firm has filed multiple claims in the past, the insurer probably won’t offer much in the form of discounts. Insurance companies make their profits from low-risk customers. This insurance industry model forces insurers to be strict and selective about who they will cover.

Another idea for lowering auto insurance costs is to be very picky about drivers and only allow those with spotless driving records to operate your vehicles. You may also consider a new trend involving telematics, in which an electronic device monitors driver behavior and mileage. The wireless device reports the data directly to the insurer. If the data shows your drivers to be safe, it can lower your rates. You can also think about cutting back on overall mileage.

Commercial auto insurance is a requirement for companies that own vehicles. While you must meet the state’s minimum requirements for coverage limits, most other add-on coverages are optional. Since every business has its own unique set of assets and personnel, it is advantageous to work with an insurance expert to customize your plan. Contact us at Pittman Insurance Group, LLC for more information on getting the ideal auto coverage for your business.

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