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Underinsured Motorist Insurance For Commercial Vehicles

There is no denying how important your business is to your life. With this in mind, it is important that you take the necessary precautions to protect it. One such precaution is having a solid commercial car insurance policy that helps protect you, your company vehicles, and any of your employees who drive those vehicles.

While most cars in most states must have some form of auto insurance coverage, there are optional coverages you can add to your commercial policy to help further protect your business. One such optional coverage is commercial underinsured motorist coverage, which helps protect your company if you or your employees get in an accident caused by a driver who does not have enough car insurance coverage.

Read below to learn more about commercial underinsured motorist coverage.

Uninsured and Underinsured: What's the Difference?

There's a slight―but important―difference between uninsured and underinsured commercial auto insurance coverages.

Uninsured motorist coverage applies to car accidents with drivers who don't have any type of car insurance. Meanwhile, underinsured driver coverage applies to accidents with underinsured drivers―drivers who do have auto insurance coverage, but not enough to pay for the damages they caused in an accident.

For either type of insurance to kick in, the other driver must be found liable for the accident.

Two Main Types of Commercial Underinsured Driver Insurance

Some commercial car insurance carriers offer underinsured coverage as a single entity, but most split it into two categories:

  • Bodily injury: Covers medical-related expenses from an accident, such as hospital bills, doctor's visits, therapy, prescription medication, and funerals.
  • Property damage: Covers repair-related costs to your commercial vehicles.

How Commercial Underinsured Motorist Coverage Works

Essentially, when you buy commercial underinsured motorist coverage, you are purchasing liability insurance for other drivers who do not have enough insurance to cover the costs related to your injuries or property damage that result from an accident they cause.

If you get into an accident caused by a driver who has liability limits that are lower than your underinsured motorist coverage limits, your car insurance company will pay out a claim for the difference between that driver's liability and your underinsured limit.

Typically, insurers will sell you underinsured and uninsured motorists coverage at limits that equal the limits of your liability insurance. In some cases, only uninsured motorist and not underinsured motorist coverage is available. Check with your commercial car insurance provider.

Does Your Company Need Commercial Underinsured Motorist Coverage?

If your company is financially stable and able to easily absorb repair or medical expenses, you might be able to get by without underinsured motorist coverage.

However, you should note that this coverage helps your employees who drive your commercial vehicles as part of their job. If they are injured in an auto accident by an underinsured motorist, having underinsured motorist coverage can be a supplement to your workers' compensation insurance.

Keep in mind that some states do require that uninsured and underinsured coverages be part of your commercial insurance policy. Check with your commercial auto insurance agent for more information.

NOTE: If you happen to be an independent contractor who uses your vehicle(s) for business purposes, check with your car insurance carrier to see if your commercial activities are covered under your personal auto policy.

Where to Buy Commercial Underinsured Motorist Coverage

Most commercial auto insurance companies offer underinsured motorist coverage. When comparing car insurance rates and getting quotes, remember to have underinsured motorist coverage factored into your quotes.

Underinsured and uninsured motorist coverages tend to be relatively inexpensive, so the benefit often outweighs the cost.

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