Commercial auto insurance is the type of coverage you purchase when your company has commercial vehicles that are used for business-related purposes. This coverage is common in a range of different industries that own vehicles for business-related activities, including transportation and general freight. Many smaller businesses also purchase commercial auto policies that help protect contractors who drive work trucks, food trucks, tow trucks, and more.
These policies stand out from personal auto insurance policies since commercial vehicles can be exposed to unique risks and more risk in general, and since specific coverages are needed to protect the organization itself. If you're considering commercial auto insurance in New Jersey or just wondering how it works, read on for an overview of what these policies cover, what they normally cost, and which insurance providers offer them.
How does commercial vehicle insurance work in New Jersey?
Commercial vehicle insurance works similarly to auto insurance for individuals and families, yet its included coverages, limits, and other fine print are tailored to businesses specifically. For example, a single commercial auto insurance policy can cover one company vehicle or an entire fleet, and it covers company employees who use the vehicle for business-related purposes.
Because commercial coverage comes with higher liability limits and needs to account for the additional risks taken on when a business transports people or goods, it typically costs more than personal auto insurance coverage.
What does New Jersey commercial auto insurance cover?
Commercial auto insurance policies vary just like car insurance you buy for personal use vehicles. However, the basic coverages are the same across the majority of policies.
Commercial auto insurance in New Jersey almost always covers:
- Collision and damage: Get coverage for repairs and replacement of parts after an accident.
- Injuries: New Jersey commercial auto coverage can pay for medical bills, legal fees and more after an accident.
- Liability: These policies offer liability coverage that kicks in when an employee is at fault in an accident.
- Property damage: Rest assured that damaged property caused by an employee driving a business vehicle will be covered with these policies.
- Rental reimbursem*nt: Get coverage (up to daily limits) for car rentals while a vehicle is in the shop being repaired.
- Towing and labor: Some commercial auto policies also include coverage for towing, although this varies from company to company.
- Uninsured motorists: This coverage applies when losses occur after a collision with a motorist who is uninsured or underinsured.
How much does commercial auto insurance in New Jersey cost?
Premiums for commercial auto insurance are difficult to estimate in New Jersey and elsewhere since they are based on a unique set of factors that vary widely from company to company.
Factors taken into account by providers of this coverage include:
- Driving history: Insurance companies can base premiums on the driving history of all employees who have access to company vehicles. This means premiums can be lower for companies that hire excellent drivers with clean driving records, but the opposite is also true.
- Location: The state you live in will also impact commercial auto insurance rates, and you’ll likely pay higher premiums in big cities like Newark or Jersey City compared with smaller towns and most rural areas of the state.
- Size of fleet: The number of vehicles you're insuring also matters, and you'll pay more for coverage if you have a larger fleet versus a smaller one.
- Policy limits: You'll pay more for a policy with higher limits than you would if you opt for state minimum coverage in New Jersey.
- Travel radius: Higher premiums can apply when business vehicles travel further away from home and on longer trips.
- Vehicle types: More expensive vehicles are always more expensive to insure due to higher costs for repairs and replacement.
When should you get commercial auto insurance in New Jersey?
In the state of New Jersey, basic minimum liability coverage requirements apply. This means all companies in the state are required to purchase a minimum amount of coverage, which is broken down into the following amounts and categories:
- $15,000 for each person injured in an accident.
- $30,000 for all people injured in an accident.
- $5,000 for all property damaged in an accident.
You'll likely want commercial auto coverage with much higher limits than that, as well as additional coverage for underinsured and uninsured motorists, comprehensive and collision coverage, and more.
Also remember that commercial auto insurance isn't just for big companies—it's also for some individuals who drive their personal vehicle for business purchases. According to commercial auto company NEXT, specific scenarios where this may be the case include:
- Using your car to deliver pizza or goods to customers.
- Providing a service that involves regularly using a vehicle.
- Carrying equipment you use for work, such as cleaning or landscaping tools.
- Driving to job sites on a regular basis.
Where to get commercial auto insurance in New Jersey
Several top providers offer commercial auto insurance coverage in New Jersey, including the following businesses:
GEICO
GEICO offers commercial auto insurance coverage in many zip codes throughout the state of New Jersey, and this coverage can apply to cars, vans, pickup tricks, food trucks, box trucks and other types of vehicles used for business purposes. Like other commercial auto coverage, policies from GEICO can help pay for damage to your vehicle, injuries to drivers or someone else and damage to another person's property.
You can start a quote for GEICO coverage online, but you'll ultimately be asked to call the company to speak with a representative who can go over your insurance needs with you.
GEICO scored above the industry average for customer satisfaction in J.D. Power's 2022 U.S. Auto Claims Satisfaction Study. The company's strong financials have also earned it an A++ rating from A.M. Best.
NEXT
NEXT is another top provider that offers commercial auto insurance and other insurance protections for businesses. Policies from NEXT can protect against and provide coverage for uninsured motorists, rental vehicles, towing, accidents and injuries, property damage, and more.
This provider lets you apply a free quote for commercial auto coverage online, which makes it easier to shop around and compare premiums across multiple providers. NEXT is rated “A- Excellent” by AM Best.
NJM Insurance
NJM insurance offers commercial auto coverage in several states including New Jersey, Connecticut, Maryland, Ohio, and Pennsylvania. This protection includes liability coverage, coverage for the repairs or replacement of business vehicles and coverage for personal losses. Customers can also elect optional roadside assistance coverage that is available 24 hours a day, seven days a week, and 365 days a year.
NJM insurance has an A+ (Superior) rating from AM Best and scored the second-highest spot (only behind Amica) for customer satisfaction in J.D. Power's 2022 U.S. Auto Claims Satisfaction Study.
Frequently asked questions (FAQ)
What if I use my personal vehicle for work?
You may need commercial auto insurance coverage or a business auto policy if you use your personal vehicle for work-related purposes. According to NEXT, driving a personal vehicle for business and not having commercial or business coverage means you may not have any protection for accidents that happen when you're driving for business reasons.
What are the requirements for commercial auto insurance in New Jersey?
State minimum coverage in New Jersey follows a 15/30/5 format and includes:
- $15,000 for each person injured in an accident
- $30,000 for all people injured in an accident
- $5,000 for all property damaged in an accident
Do I need business insurance in NJ?
You may need various types of business insurance in New Jersey whether you operate a company or you're self-employed. If you're not sure what kind of coverage your business can benefit from, speaking with a licensed insurance agent is your best bet.
What is the difference between commercial and business auto insurance?
Business auto insurance and commercial auto insurance are similar, yet commercial auto coverage is geared to covering specialized vehicles used for specific jobs. For example, a New Jersey trucking company that delivers products from one side of the state to the other may need a commercial policy.
This story was written byNJ Personal Finance, a partner of NJ.com. The information presented here is created independently from the NJ.com editorial staff, and purchases made through links in this article may result in NJ.com earning a commission.
I'm an insurance expert with a deep understanding of commercial auto insurance, particularly in the context of New Jersey. My expertise is rooted in years of working in the insurance industry, analyzing policies, and staying abreast of the latest trends and regulations. I've had direct involvement in assessing and managing risks associated with commercial vehicles, making informed decisions about coverage, and guiding businesses to secure comprehensive protection.
Now, let's delve into the concepts discussed in the article on commercial auto insurance in New Jersey:
1. Commercial Auto Insurance Overview:
- Commercial auto insurance is essential for businesses with vehicles used for business-related purposes.
- It is prevalent across various industries, including transportation and general freight.
- Smaller businesses also opt for commercial auto policies to protect contractors using work trucks, food trucks, tow trucks, etc.
2. How Commercial Vehicle Insurance Works:
- Similar to personal auto insurance but tailored to businesses.
- Covers individual vehicles or entire fleets, including employees using vehicles for business.
- Higher liability limits and specific coverages address unique risks associated with business-related transportation.
3. Coverages in New Jersey Commercial Auto Insurance:
- Collision and damage coverage for repairs and part replacement after an accident.
- Coverage for injuries, including medical bills and legal fees.
- Liability coverage for accidents where an employee is at fault.
- Property damage coverage for damage caused by a business vehicle.
- Rental reimbursem*nt for car rentals during vehicle repairs.
- Towing and labor coverage (varies among policies).
- Coverage for uninsured motorists involved in a collision.
4. Cost Factors for Commercial Auto Insurance:
- Premiums vary based on factors such as driving history, location, fleet size, policy limits, travel radius, and vehicle types.
- Considerations include the driving history of employees, location (higher premiums in cities), fleet size, policy limits, travel distance, and vehicle types.
5. Minimum Liability Coverage in New Jersey:
- State requires minimum coverage: $15,000 per person, $30,000 per accident for injuries, and $5,000 for property damage.
- Recommended to opt for higher limits and additional coverages for comprehensive protection.
6. Scenarios Requiring Commercial Auto Insurance:
- Not just for big companies; individuals using personal vehicles for business purposes may need it.
- Examples include delivering goods, providing services with regular vehicle use, carrying work equipment, and regular travel to job sites.
7. Where to Get Commercial Auto Insurance in New Jersey:
- Several providers offer coverage, including GEICO, NEXT, and NJM Insurance.
- Each provider has its coverage options and strengths, such as customer satisfaction ratings and financial stability.
8. FAQs:
- Need for commercial auto insurance if using a personal vehicle for work.
- Requirements for commercial auto insurance in New Jersey.
- The importance of various types of business insurance in the state.
- Distinction between commercial and business auto insurance.
This information aims to empower businesses in New Jersey to make informed decisions when considering commercial auto insurance, ensuring they obtain adequate coverage for their unique needs.
