Contractor's Commercial Auto Insurance Types

Autos are an essential part of any commercial or construction activity. You may drive your own commercial auto, drive a vehicle on hire or engage driver's to take care of your transportation needs. An important thing to be aware of is the possibility that breakdowns and accidents always exist especially on our congested highways in California.

According to the state of California a commercial auto is one that carries people or products on hire or for purposes of business. A vehicle being for purposes of a construction business falls under the category of commercial auto. A commercial auto can transport people or goods. It is allowed to transport hazardous materials. It can tow other vehicles, or vehicles of certain weight and axel design.

Contractors’ Commercial Auto Insurance Needs and Options

There are many types of auto insurance policies to cover many situations pertaining to contractors’ commercial autos.

Your vehicle may be involved in a collision causing physical damage to the driver and the goods the vehicle is carrying. The collision may occur headlong with another vehicle coming from the opposite direction, from behind or sideways. Your vehicle may also collide with a stationary object such an electric pole, wall or a building. There is an insurance policy to cover this kind of accident.

The second type of policy may offer insurance for comprehensive physical damage due to reasons not limited to the damage caused by the accidents alone. A comprehensive policy may include damages caused by vandalism, fire, theft, storms and hails and so on.

The third type of insurance may cover the uninsured or underinsured damage to your auto which may be caused by your negligent driver who is either not insured or is just underinsured for property damage coverage.

The fourth type of insurance provides for coverage for physical injuries caused by a negligent driver with no liability insurance or less liability than you.

The fifth type of insurance covers hired or non-owned autos. It provides coverage for any claims for physical injury or damage to property which you are obligated to pay to the owner of the hired vehicle, or a vehicle you do not own, but use it for your business purposes.

The sixth type of insurance policy is meant for lease gap coverage. It covers the vehicles you lease in for your business. If the leased vehicle is completely damaged in an accident, this policy will make payment for the remaining amount of balance on the lease if it is more than the actual cash value of the leased vehicle.

As is evident from above, contractors’ commercial auto insurance may cover just one or all aspects of commercial transportation related to construction business. While some aspects of the coverage are legally binding because of the insurance laws in California, other types of coverage is optional. It is the responsibility of the contractor to decide which aspect of driving liability is more important to him. It must be noted that each type of coverage has its own premium and benefits. Add up all the types of coverage you need and you get the total price you may have to pay to buy your commercial auto insurance policy.