State Farm Auto Insurance: Understanding Commercial Use Coverage

State Farm® commercial auto insurance provides coverage options for businesses that own or lease vehicles. This includes cars, trucks, vans, pickups, farm vehicles, and more. The insurance covers the costs of repairs, legal fees, and medical bills in the event of an accident involving the policyholder or their employee. State Farm also offers additional coverage options, such as employers' non-owned and hired car coverage, for employees using their personal vehicles for business purposes or short-term leased/loaned vehicles. The cost of commercial auto insurance depends on factors such as the number of vehicles, their value, usage, and industry. State Farm also provides other business insurance options, including small business insurance, auto service shop insurance, and commercial liability umbrella policies.

Commercial auto insurance for small businesses

Commercial auto insurance is a type of business insurance that covers vehicles owned by and used in your business, such as cars, trucks, and vans. It is designed to protect your business from financial losses in the event of an accident involving your business vehicles. This includes repairs, legal fees, and medical bills. Commercial auto insurance is typically required by law in most states and is essential for businesses that own or lease vehicles.

State Farm, one of the largest insurers of automobiles in the US, offers commercial auto insurance for small businesses. Their coverage options include liability coverage for bodily injury and property damage claims, personal injury/medical payments coverage, collision coverage, and comprehensive coverage. State Farm's commercial auto insurance is available for various vehicles, including cars, trucks, vans, pickups, and farm vehicles.

• Customization: Commercial auto insurance policies can be customized to meet the specific needs of your business. You can select from a range of coverage options and combine them into a single policy.
• Cost: The cost of commercial auto insurance varies depending on factors such as the number of vehicles, their value, usage, and your industry. It is typically more expensive than personal car insurance due to the higher risks and liability limits involved in commercial activities.
• Protection for Employees: Commercial auto insurance policies can also cover your employees who drive company vehicles or their own cars for business purposes. This ensures that your business is protected from potential liabilities arising from employee vehicle use.
• Peace of Mind for Customers: Having commercial auto insurance demonstrates to your customers that your business is prepared for unexpected events. It shows that you are reliable and can handle unforeseen circumstances.
• Legal Requirements: Most states require businesses to carry a minimum amount of commercial auto insurance, especially for liability coverage. It is essential to comply with the legal requirements of your state to avoid penalties.
• Additional Coverage Options: In addition to the standard coverage options, you may want to consider additional coverages, such as employers' non-owned and hired car coverages. These coverages apply when employees use their own vehicles for business or when vehicles are rented, leased, or borrowed for short-term business use.

Comprehensive coverage

Comprehensive car insurance can help you recover from a variety of unfortunate events, including:

• Weather conditions such as wind damage from hurricanes, floods, hail, and falling objects
• Fires and explosions
• Total or partial car theft and vandalism
• Hitting or being hit by a deer or other animals
• Violence from civil unrest or riots
• Glass claims and windshield repair

To determine if you should purchase comprehensive coverage, consider the approximate value of your vehicle and how much you can afford to pay out of pocket if you experience an accident that isn't covered by collision insurance.

Liability coverage

State Farm's liability coverage extends beyond just auto insurance and includes commercial, personal, and professional liability options. Here is a more detailed overview of each type of liability coverage:

Commercial Liability Coverage:

State Farm's commercial auto insurance provides coverage for businesses that own, lease, or rent vehicles. This includes cars, trucks, vans, pickups, and even farm vehicles. Commercial liability coverage helps protect your business in the event of an accident involving your employees or company vehicles. It covers bodily injury and property damage claims, as well as legal fees and medical bills. This type of coverage is essential for businesses to mitigate the financial impact of accidents and ensure they have the necessary protection.

Personal Liability Coverage:

State Farm also offers personal liability coverage, often referred to as a Personal Liability Umbrella policy. This type of coverage is designed to provide additional protection beyond your primary policies, such as auto, home, or boat insurance. Personal liability coverage is crucial in cases of significant injury or property loss resulting from accidents. It helps protect your financial future by providing coverage for judgments or settlements that exceed the limits of your primary insurance policies.

Professional Liability Coverage:

State Farm's professional liability insurance, also known as errors and omissions insurance, is specifically designed for certain professions, including architects, engineers, and accountants. This coverage protects your business if you are sued for negligence, errors, or omissions in the services you provide to your customers. It helps cover legal defence costs and financial losses that could otherwise be detrimental to your business.

State Farm allows customers to customise their insurance plans and choose from a range of coverage options. It is important to remember that coverage options, deductibles, and availability may vary by state, so it is always advisable to consult a State Farm agent to discuss your specific needs and determine the most suitable liability coverage for your situation.

Uninsured/underinsured motorist coverage

State Farm auto insurance offers commercial auto insurance for businesses that own or lease vehicles. This insurance covers the costs of repairs, legal fees, and medical bills in the event of an accident involving the policyholder or their employee.

Now, let's discuss uninsured/underinsured motorist coverage in detail:

• Uninsured motorist coverage protects you if you're hit by a driver with no auto insurance. It helps cover your medical bills, your passengers' medical bills, and repairs to your vehicle.
• Underinsured motorist coverage, which is often offered alongside uninsured motorist coverage, comes into play when the at-fault driver doesn't have sufficient insurance coverage to pay for the damages or injuries they caused.

In many states, uninsured/underinsured motorist coverage is mandatory, and even if it isn't required in your state, it is highly recommended for all drivers. According to the Insurance Information Institute, nearly 13% of drivers nationwide don't have auto insurance, and this number can exceed 20% in certain states. Without this coverage, you could be left paying out of pocket for medical bills and vehicle repairs if you're in an accident with an uninsured or underinsured driver.

Even if you have health insurance, uninsured/underinsured motorist coverage is still important. Your health insurance may have deductibles or limitations that could leave you with significant out-of-pocket expenses. Additionally, uninsured/underinsured motorist coverage can provide benefits that your health insurance may not, such as lost wages and coverage for your passengers' injuries.

The amount of uninsured/underinsured motorist coverage you need depends on various factors. You can choose the insurance limits of your coverage, and it's recommended to match the bodily injury portion with your liability coverage. For example, if your liability coverage is $50,000 per person and $100,000 per accident, you should consider the same limits for your uninsured/underinsured motorist coverage.

Yes, uninsured motorist coverage typically covers hit-and-run accidents as well. In such cases, you can file a claim against your policy's uninsured motorist coverage to help pay for damages or injuries.

In summary, uninsured/underinsured motorist coverage is a vital component of auto insurance, providing financial protection and peace of mind in the event of an accident with an uninsured or underinsured driver. By understanding the specifics of this coverage and selecting appropriate limits, you can ensure that you're adequately protected on the road.

Collision coverage

Whether or not collision coverage is worth it depends on your car's value. Many people prefer to cover newer cars, but as cars get older, their values decrease, and you might consider omitting or dropping this coverage to save money on your auto insurance.

Frequently asked questions