Commercial Auto Insurance in Massachusetts

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What is commercial auto insurance?

Commercial auto insurance is coverage intended to pay for losses involving cars, trucks, vans, and other vehicles that operate in the course of doing business. In Massachusetts — as in most states — commercial vehicle insurance is a compulsory type of coverage. You cannot drive your business vehicle (or get it registered, for that matter) without maintaining required levels of protection.

Do I need commercial auto insurance?

The simple answer is: if you own, lease, or rent a vehicle that you use for business purposes (i.e., making money), then YES, you need commercial auto insurance in Massachusetts. However, as is often the case when it comes to insurance, there are exceptions to this rule. (And leased/rented vehicles, by the way, require a special type of commercial auto coverage; more on this below.)

Note: In cases where a vehicle is used for both personal and professional reasons — e.g., you drive your SUV for Uber or Grubhub; you deliver firewood in your pickup, as a “side gig” — you may be able to obtain the necessary coverage without purchasing a commercial auto policy. For cases like these, we recommend discussing your situation with an agent who can advise on available options and coverage strategies.

What does commercial auto insurance cover?

Commercial auto insurance mainly covers expenses from four main types of loss events. These aren’t technical terms, but to keep things simple let’s just say:

  • At-fault collisions that hurt other people or their property
  • At-fault collisions that hurt you, your employees, or your company property
  • Non-fault collisions that result in damage or injury, caused by uninsured drivers
  • Physical damage or property loss not caused by an auto collision (but by nature, theft, vandalism, other)

Most people tend to think of commercial car insurance or auto insurance as protection against accident liability (the first bullet listed above). And that is certainly a major piece of the puzzle. If you or an employee causes an accident that destroys another car or sends a motorist to the hospital, you need coverage to address those significant costs.

But commercial auto insurance also exists to pay for your damaged vehicle, property, and personal medical expenses. (For example, your employee backs the company truck into your garage. Ouch.) It’s also designed to step in when an accident occurs between you and an uninsured driver. (Did you know that an estimated 6.2% of Massachusetts drivers carry NO insurance? And many, many more carry insufficient amounts.)

Finally, commercial auto insurance is there to address a broad category of “other” damaging events. Extreme weather, for instance, can damage commercial fleets in the form of downed trees, hail stones, rising flood water, etc. A family of mice could chew through the wiring of your vehicle over the winter months. In these cases — and many more — it’s good to know you have comprehensive coverage on your business vehicles.

What does commercial auto insurance NOT cover?

Over the years, we’ve heard some common misconceptions about commercial auto policies. So, here’s a quick list (by no means exhaustive) of some loss events that standard commercial auto probably would not cover — but rather, would require a separate policy or endorsement:

  • Damage caused to or by leased/employee-owned vehicles. (You would need a separate policy known as Hired and Non-Owned in order to address your auto liability in these cases.)
  • Damage or injury caused by equipment attached to a covered auto — for example, a snow plow newly attached to your company truck. (Adding new machinery to a covered auto often requires a conversation with your insurance agent.)
  • Very expensive claims or lawsuits that exceed the limits of your policy. (This is why it often makes sense to carry business umbrella coverage on top of commercial auto.)
  • Mechanical breakdown during the course of a job. (Although it could be very costly to have your bulldozer quit, or your party bus break down during prom season, these are not covered events under a standard commercial auto policy.)
  • Any commercial vehicles that are not scheduled on the policy because your vehicle list is not regularly reviewed and updated.

Other items to ask about, which may or may not be included in your commercial auto policy:

  • Temporary rental vehicle/equipment coverage
  • Gap coverage (to address the difference between what you owe on a vehicle with a loan and what your insurer will pay in replacement value)
  • Personal property coverage (for items inside a company vehicle that is totaled or stolen)
  • Hired and non-owned liability (as noted above)
What does commercial auto insurance cost?

It would be impossible to offer any specific numbers without getting information about your business and its vehicles. But we can tell you about the different factors that go into commercial vehicle insurance rates:

  • Number, age, and type of vehicles on the policy
  • Types of risk involved (e.g., transporting students versus hauling hazardous waste)
  • Company history of loss events
  • Drivers and their driving records
  • Driving range (local, intermediate, long-haul)
  • Your coverage limits (i.e., opting for $1 million in auto liability versus $500,000)

Some of these factors are outside your control. But others — including your company’s track record for accidents and the quality of the drivers you hire — are variables you can proactively manage. A quality insurance partner will assist you in improving factors like fleet safety and driver hiring/training. In fact, if you aren’t getting any help in these areas now, it may be time to explore other commercial auto agents.

What are the required commercial auto insurance limits in Massachusetts?

Believe it or not, Massachusetts requires commercial vehicles to carry the same limits of coverage as personal autos. These limits (listed below) aren’t very high, in relation to the average cost of a serious collision.

  • Bodily injury to others: $20,000 per person; $40,000 per accident
  • Personal injury protection (PIP): $8,000 per person
  • Bodily injury caused by uninsured auto: $20,000 per person; $40,000 per accident
  • Damage to someone else’s property: $5,000 per accident

For obvious reasons, we recommend that business owners opt for heightened coverage limits, along with business umbrella insurance in many cases.

Does construction equipment count as a commercial “auto” or as mobile equipment?

Great question. This can be a tricky point for landscapers, arborists, builders, and other types of contractors who buy vehicles with wheels or crawler treads. A pretty simple rule of thumb, which works in most cases, is this: if the vehicle can travel on public roads, it’s an auto; if it is primarily designed to move and operate off of public roads, it is considered mobile equipment.

Sometimes a vehicle falls into both categories. Cherry pickers and bucket trucks, for example, may be considered vehicles and mobile equipment. Many vehicles with attached machinery — like drills, cranes, diggers, or loaders—are considered vehicles on the road and mobile equipment when in use, on site. Ask your agent to help you understand the differences between these categories, including how to properly insure against liability claims.

Where’s the best place to buy business auto insurance in Massachusetts?

If you Google this question, you may find a list of companies offering to provide you with a quote online or over the phone. These companies are national, “direct writers” (like Progressive, for example). It’s possible to buy auto coverage directly from a carrier like this (i.e., without any help from a licensed agent), but we don’t think that’s the smartest option. More on why below.

Some of the results you’ll find are for more local carriers (like Safety, Plymouth Rock, or Arbella), who will put you in touch with an independent agent near you. Usually, you can enter your zip code on their website and generate a list of agencies in your town/city. This is a good start, but it’s still important to do your due diligence. Just because an agency has an office in your neighborhood doesn’t mean they are best suited to advise you on the specific type of operation you’re running. We recommend comparing these agency results by visiting their websites and checking to see the industries in which they specialize.

Finally, some of the results you see will be for independent agencies like ours. Agencies like C&S don’t issue the actual insurance policy; instead, we act as advisors and advocates, working on your behalf to find you the best business auto carrier.

Call us biased, but we think business owners are best served by local, independent agents when shopping for auto insurance. Why? Because there’s much more to discuss than just the annual premium you will pay. Independent agents like ours are skilled at helping you understand how an auto policy fits into your overall business plan, where gaps in protection may exist, and steps you can be taking to avoid loss events while improving your rate and carrier options in the long term.

We’re also an excellent resource if you ever need to file a claim or interact with the Massachusetts RMV (see below).

My commercial auto policy was canceled. What now?

Don’t worry! You can still get insurance.

When purchasing commercial auto insurance, there are two separate “markets.” Businesses with a solid track record of safe operations will typically buy coverage from the voluntary market of insurance carriers. Companies whose records indicate a history of accidents, claims, or cancelation for non-payment may need to purchase coverage from the residual market. In Massachusetts, this market is operated by Commonwealth Automobile Reinsurers (CAR). A good agency partner will help you avoid landing in the residual market (or help you out if you’re already there) because it tends to be significantly more expensive.

Why choose C&S for help with commercial auto insurance?

There are four major reasons it makes sense to contact C&S when exploring commercial auto insurance options:

CARRIER ACCESS
We have relationships with dozens of commercial insurance carriers, which means we can often supply more/better quotes and policy terms than the average local agency.

LOCAL EXPERTISE
As you probably know, Massachusetts does things differently than other states when it comes to insuring commercial trucks, trailers, and equipment. it’s not uncommon for the rules to change or for MA RMV directives to arise that require your immediate attention. We stay on top of what’s happening in Massachusetts so our commercial auto clients are always prepared and fully covered. We also share important commercial auto news via our newsletter and blog.

COST-CONTROL SERVICES
As noted above, we believe in helping our clients optimize the rating factors that determine their commercial auto premiums. We do this by offering support in the creation of driver safety manuals, providing onsite trainings and training videos, plus sharing best practices in recruiting and retaining responsible drivers.

IN-HOUSE REGISTRY & RMV RUNNER SERVICES
For our commercial clients with large fleets, we’re able to execute RMV errands on your behalf. Our ability to complete many commercial plate transactions in-house is another plus point for busy owners and their teams.

There’s plenty more to say about commercial auto policies in M­A — and we’d love to walk you through it when you’re ready. If you need commercial car insurance, truck insurance or any time of commercial vehicle insurance, give us a call at 508-339-2951 or complete the form on this webpage for any additional answers you may need.