The Basics of Commercial Auto Insurance
California and Hawaii require people and businesses who operate motor vehicles to have liability insurance. These rules about mandatory auto insurance are in place to help ensure people receive fair compensation in the event of a loss.
While this seems like a reasonable protection, many companies take out the minimum coverage to satisfy the regulation and get their vehicles on the road at the lowest possible cost. That approach can leave your commercial vehicles, employees and business grossly underinsured. That’s why at Brashears Insurance, our professionals are committed working with companies to ensure you have appropriate commercial auto insurance protections.
Minimum Auto Coverage May Fall Short
California is considered an at fault insurance state. That means that the driver found to be negligent is responsible for paying any loss. Other states, such as Hawaii, take a no-fault approach, which means each person’s insurance generally takes care of their own losses. But both states have one thing in common, inadequate minimum coverage standards.
California Minimum Liability Coverage
- $15,000 for injury/death to one person.
- $30,000 for injury/death to more than one person.
- $5,000 for damage to property.
Hawaii Minimum Liability Coverage
- $20,000 for bodily injury, per person.
- $40,000 for total bodily injury if multiple people are injured.
- $10,000 for property damage.
Consider any significant injury such as whiplash, a broken leg or minor surgery. When you factor in the high cost of health care, a hospital stay, treatment, rehabilitation and loss of wages, it is highly unlikely that $15,000-$20,000 will meet those costs.
In terms of property damage, there are not many — if any — new vehicles that can be replaced for under $10,000. Once your insurance coverage has been exhausted, an injured party or their loved ones could look to you to pay out of pocket. If you don’t have the ability to write a check, they could file a civil lawsuit against you and your business.
Are You Adequately Protected?
If you are operating commercial vehicles based on state insurance minimums, the short answer is: No. Regardless of whether you own and operate a large or small business, it’s important to think in terms of full coverage. In other words, what is a reasonable worst-case scenario and will you and your business be financially secure.
As a business owner, items such as bodily injured should be explored in terms health insurance cost and the expectation they will increase. Consider the cost of replacing your commercial vehicle, the financial setback you’d suffer without it and the possibility of replacing another driver’s expensive new car.
It’s important not to fall into the minimum insurance trap. In the end, it may cost you more than it saves. At Brashears Insurance, we’ll discuss options such as collision, comprehensive coverage, uninsured motorist, medical coverage and other things when creating a policy to protect your financial interests.
We are proud to serve businesses in California and Hawaii and our professionals are available to help you today. Please contact us today for more information. Our goal is to help you to protect yourself.