Commercial Auto Insurance Minimum Requirements in Rhode Island

Rhode Island law holds all drivers to a minimum standard of financial responsibility for injury or damage they may cause with their vehicles in the future. If you can’t prove you have adequate financial responsibility, you cannot legally drive on public roads in the state.

If you own a business, you’re obligated to adhere to the same minimum requirements for each of your company vehicles, just like individual drivers. Whether your vehicles are cars, trucks, vans, trailers, motorcycles, or buses, you’re financially responsible for them all.

Ways to Establish Financial Responsibility

For most drivers, the easiest way to establish financial responsibility is to purchase a vehicle liability insurance policy―but it’s not the only option available. The following are the various "proofs" the state will accept when it comes to potential vehicle liability:

• A liability insurance policy covering your vehicle(s).

• A surety bond issued by a company authorized to do business in Rhode Island, or signed by two state residents who own property with a combined value of at least two times the bond amount.

• A deposit of $60,000 in cash or securities given to the state treasurer.

• A self-insurance certificate issued by an authorized Division of Motor Vehicles (DMV) employee (this option is available only if you own more than 25 vehicles).

Determine Whether You Need Commercial Insurance

It’s up to you, basically, to choose whether you get a personal insurance policy on each vehicle or an umbrella-type of commercial vehicle insurance that covers all your vehicles. But the first questions to consider in the process are:

• How many and what kind of vehicle(s) you need to insure

• How the vehicle(s) is being used

• Who drives the vehicle

• Who owns the vehicle

The answers to the items above can guide you in your decision. Typically, business owners should get commercial insurance if they have vehicles for business purposes only, or if they employ multiple workers who drive the business vehicles. If you only have one or two cars and you drive them both for work and for personal use, a simple personal car insurance policy could suffice.

A good example of a business that needs a commercial policy is a plumbing company. The owner has five trucks that carry all the necessary equipment for the job, as well as seven employees who drive the trucks on various shifts.

A good example of a business that could be fine with a personal vehicle insurance policy is a computer repair specialist who makes house calls. This owner drives his own car during business hours, and doesn’t have any additional employees.

In other words, you’ll most likely need commercial vehicle insurance if:

• You have a business that primarily transports people or products.

• You have a trade business that requires multiple vehicles driven by multiple workers.

• Your business vehicles include specialized built-in equipment used solely on the job.

• You want to cover the employees who drive your business vehicles, or their own vehicles for business purposes.

• You need an auto policy with a coverage amount higher than a personal auto policy.

If you need help determining whether you need commercial vehicle insurance, you can contact the DMV or a state-licensed insurance agent.