How Much Will Commercial Auto Insurance Cost A Small Business In New Mexico?

If your business uses vehicles for any operation within the company, you need to consider commercial auto insurance. Commercial auto insurance takes into account the costs of accidents of your business’ vehicles. It covers vehicle vandalism, theft, and similar damages.

Regardless of the size of a business, commercial auto insurance is beneficial for large fleets and small businesses alike. However, the cost of a commercial auto insurance policy can differ based on the amount of coverage you have purchased, the number of vehicles covered, and the kind of vehicles used by your small business in New Mexico.

Generally, these are the three broad coverage options available:

• Vehicles owned by your business
• All vehicles your business owns, leases, or hires
• All vehicles used by your company, including those that are not owned, leased, or hired by the company. 

Businesses usually prefer the third option. This is the only kind of coverage that safeguards a business from liability if the owner or employee drives a personal vehicle for business purposes. 

Coverage

A commercial auto insurance policy can offer coverage for the following:

Auto Accident Liability

This aspect considers account liability coverage that pays for damages when you or an employee is at fault in an accident. This may include repair expenses for the damaged vehicle or property of the other party and the cost of legal defense if the other party gets injured and files a lawsuit against your small business in New Mexico.

For instance, an employee hits a sports car from the back while driving your business’s truck. In this case, the accident is your employee’s fault.

If your small business in New Mexico carries an auto insurance policy, your insurance provider can take care of the repair expenses of the sports car. The policy can also pay for the other party’s medical expenses due to injuries sustained in the accident.

Medical Expenses

This coverage is available, no matter who was at fault in an accident. A commercial auto insurance policy is likely to cover medical payments, such as:

• Your medical bills (if you were injured in a car crash)
• Medical bills of the injured passengers in your car

For example, a janitor meets with an accident while driving a cleaning company’s vehicle to a customer’s office. No one sustains a serious injury, but the janitor had to be transported to a hospital and prescribed x-rays. In this case, the cleaning company’s insurance policy would take care of the conveyance costs as well as the medical treatment.

Physical Damage and Collision 

In case of vehicle theft or physical damage due to a collision, commercial auto insurance can take care of a major chunk of the costs. The damage may be due to vandalism, impact with another object, or specific weather events. 

For instance, a tree uprooted due to a windstorm happens to fall on top of a lawn care firm’s vehicle, breaking the windshield. If the lawn care company carries an auto insurance policy, the insurance provider will pay for the windshield replacement. 

Accidents Involving Uninsured Drivers

Did you know that as many as 8 out of 10 motorists in the United States are uninsured? When they are at fault in an auto accident, it may be difficult for them to meet the costs of damages. 

The uninsured motorist aspect of your commercial auto insurance policy would ensure that your company does not have to bear the costs of the resulting vehicle repairs or medical bills. 

For example, a staff member at an IT company is on their way to a customer’s house when another driver violates a stop sign and collides with your company car. If it turns out that the other party is not insured, your firm’s commercial auto insurance policy can take care of the damage to your vehicle caused by the uninsured motorist. 

Options and Add-Ons

You can customize your commercial auto insurance policy by adding a few extra options, such as: 

Roadside Assistance

This offers coverage when issues emerge that your commercial auto insurance policy usually does not take into account. Examples include dead batteries, being locked out of your own car, and flat tires. 

Hired Auto Physical Damage with Loss of Use Coverage

This takes into account comprehensive and collision damage to rented or leased car, as well as other predetermined obligations to the rental or leasing company.

New Vehicle Replacement Cost Coverage

This replaces a new car under a total loss with a vehicle of similar value. It also includes gap coverage for any amount you may owe that exceeds the real cash value of your car.

Expanded Towing

This pertains to towing coverage that is beyond the amount covered by your regular auto insurance policy. It takes into account jump starts, towing, and other minor roadside repair expenses.

Auto Loan or Lease Coverage

This covers the gap between the unpaid amount on the lease or loan and the real cash value of your business vehicle. The aspect comes into play when your vehicle is at a total loss following an accident. 

Rental Reimbursement

If you’ve been in an accident, you will require a rental car to transport you. This add-on takes into account the cost of the rental car up to your policy limits.

Medical Expenses or Personal Injury Protection Coverage

In some cases, your healthcare insurance may not be sufficiently cover the costs arising from an accident. This aspect takes care of your medical bills if your or your passengers’ healthcare insurance is inadequate for covering the costs.

Accessories Cover

This offers coverage for expensive vehicle accessories against theft and damage as a result of untoward events. Accessories are either electrical or non-electrical. You can purchase coverage for common vehicle accessories, which may include the following:

• GPS Station Announcer
• Curtains
• Door grab handle for cargo trailer
• Waterproof front camera for bus
• Bus flooring
• Laminated windscreen

Consumables Cover

Consumables refer to certain parts of your vehicle. They may include screws, bolts, washers and brake fluid. Standard bus insurance or taxi insurance policies may not take consumables into account as they are mostly used exclusively by high-end vehicles. Moreover, this coverage is not meant for older vehicles.

Invoice Protection

This add-on ensures that your claim is settled so that you can recover the whole amount of the loss, that is, the on-road price of the car at the time you bought it. It basically covers the gap between the invoice value of the car and its Insured Declared Value (IDV).

The IDV indicates the value of the car after deducting depreciation from its original cost. However, it is vital to remember that the invoice protection coverage is not valid for vehicles that are more than three years old. This clause may contain variations, depending upon the insurance company you choose.

What’s Not Covered?

While commercial auto insurance is a comprehensive policy, there are certain aspects it does not cover, which may include the following:

• The contents you are carrying in your vehicle
• Injuries sustained by employees while driving (this aspect is commonly taken into account by workers’ compensation insurance)
• Ridesharing for a company, such as Uber or Lyft
• Accidents that occur when employees are driving their personal vehicles for business purposes

Nevertheless, some of these aspects may be covered if you purchase the relevant add-ons. Commercial auto insurance usually offers coverage for your business vehicle, but does not take into account the contents inside. If you wish to insure business property in transit, you will require a different insurance policy, such as commercial property insurance or inland marine insurance.

The Cost of Commercial Auto Insurance Policy

The cost of a commercial auto insurance policy depends on multiple factors, such as the number of vehicles owned by your business, their cost, and the extent of their use for your small business in New Mexico.

Average costs for commercial auto coverage are $900 - $1,200. Let's see some examples:

Common limits, coverage, and costs with the driver having a clean driving record:

• $1 million liability
• Comprehensive Coverage: $500 deductible
• Collision Coverage: $500 deductible 

Here are some of the factors that may influence the cost of a commercial auto insurance policy:

Industry Risk

If your business belongs to a high-risk industry, you may face a higher commercial auto insurance cost. The reason is that your company is prone to a larger number of risks, so you may require extra liability coverage to protect your small business in New Mexico.

For example, a food truck that is on the road most of the time during the day may cost more to insure. Similarly, if your business owns construction vehicles that often visit dangerous locations, you may have to pay more for their insurance.

Business Location

The price you have to pay for a commercial auto insurance policy may depend on the area where your small business in New Mexico is located. Generally, companies operating in populated areas are quite vulnerable to crime and vandalism, which results in a higher insurance rate. 

Coverage Limits

The coverage limits you choose has a direct impact on the cost of commercial auto insurance for your business. If you are looking for a policy that takes into account various kinds of damages, you will need to select higher limits for your policy.

Benefits of Commercial Auto Insurance

Many businesses heavily rely on commercial vehicles for everyday operations. Whether your business vehicles are owned, rented or leased, it is vital to secure proper insurance coverage for them. Here are some of the main benefits of carrying a commercial auto insurance policy:

Higher Limits

Every day that you or a staff member drives a business vehicle, there is a risk of an accident. In case of such a scenario, a third party may file a lawsuit against your small business in New Mexico, which may cost you dearly. 

It is common for expenses such as attorney’s fees, punitive damage and medical bills to reach six figures. This amount may go beyond the limits of your personal auto insurance policy. Commercial auto insurance policies usually have higher limits as they take into account all of your business vehicles.

Protection of Business Equipment

As a business owner, you may be carrying certain business tools and equipment inside your vehicles, such as hydraulic lifts and catering equipment. Personal auto insurance policies usually do not take these items into account. However, with the right commercial auto insurance coverage, you can have them insured.

Protection of Employee Drivers

As an owner of a small business in New Mexico, you are likely to have many tasks to take care of. This means you cannot do everything at the same time and need employees to facilitate you. You may often require your employees to drive business vehicles.

If an employee meets with an accident while driving for work purposes, a commercial auto insurance policy can cover the costs. Your auto insurance coverage will safeguard you from lawsuits that may be filed against your business due to at-fault accidents.

Meet Fleet Lease Requirements

Lessees generally require companies to carry a commercial auto insurance policy. This will protect their interests if you happen to meet with an accident. It will protect them from certain risks of losses in case of any damages to your small business in New Mexico.

Better Credit Risk

Lending institutions, such as banks, consider several factors when you apply for a loan. Other than your income and credit score, your insurance coverage also impacts your ability to repay. 

If you are financing your commercial car purchase, the lender is likely to need a particular level of insurance coverage. Opting for a commercial auto insurance policy with good limits may cause a lender to consider your application more seriously.

More Customers

Due to a competitive business environment, your small business in New Mexico requires every possible advantage to create a positive business image. Customer service is a significant factor when buyers are shopping around.

Consumers want to believe that the business they are dealing with is concerned about their well-being. Therefore, carrying sufficient auto insurance coverage is a simple and effective way to show customers that you care.

Unforeseen incidents involving commercial vehicles, such as theft, vandalism and vehicle damage, can occur without warning. In case of an accident, carrying a commercial auto insurance policy covers physical damage to your vehicle, medical expenses, legal costs in case of a lawsuit filed by a third party, and repair expenses for damage to a third party’s vehicle or property. This policy can effectively protect your small business in New Mexico from large expenses to ensure smooth operations.