Navigating the dynamic landscape of a business's operations can be a lot to juggle for any business owner. As your business evolves, so do your risks and needs - making it important to know when you should update your insurance policy for accurate coverage.
This is especially important for any changes made to your company’s auto operations, as changes in fleet size, new modifications, or hiring new drivers can all warrant updates to your current commercial auto policy.
As changes big and small are likely being made to your business's auto operations throughout the year, we’ve outlined some scenarios in which you should contact your insurance agent or provider to update your commercial auto policy.
Adding new vehicles
If your business is adding a new vehicle or changing your business’s entire fleet of current vehicles, it would be a good idea to update your insurer on the upcoming changes.
However large the update to your company's vehicles, reviewing your commercial auto policy with your agent or insurance provider can ensure your business will have the adequate coverage it needs while out on the road.
When adding a brand new vehicle to your operations, you should look into updating your policy by:
- Increasing injury and property damage liability limits
- Increasing limits for product/equipment protection or getting an inland marine policy
- Listing the new vehicle(s) make, model, and drivers
You may also want to consider raising your comprehensive and collision limits on your policy for added protection, but this will increase the deductible you would have to pay out after a claim.
Removing vehicles
If your business is in the process of downsizing or removing certain vehicles from your operations, you will need to update your insurer on this change.
In order to do this, the plates for the vehicle being removed must be canceled online with the Registry of Motor Vehicles for your agent to be able to remove the vehicle from your policy. You would also need to send your agency or provider the plate return receipt to process the removal.
Changes in operations
As the work your business does plays a vital role in determining your policy premium, you should update your insurer on any major changes to your business’s auto operations.
Since some business operations are seen as inherently riskier by insurers, your rates could fluctuate depending on what operations you are adding or removing from your business, as well as where/how far the vehicle will be traveling. An example could be if your business is adding a delivery service or starting to carry passengers, your policy would need to be adjusted for coverage to ensure the new operations are fully covered.
Similarly, if you plan on providing a company-owned vehicle to an employee to utilize outside of work hours, it is a good idea to know how they are covered. For more information about how your policy will cover company-owned vehicles for employees, check out this article: What You Need to Know When Supplying a Company-Owned Vehicle to an Employee.
Changes in service area
Expanding the reach of your business’s current operations, or limiting your service areas? If you are making any changes to your service area, now is the perfect time to update your insurer.
How far and where your vehicles will be traveling is used by insurers to determine your policy's rates. Updating them on any changes is the safest way to make sure you’ll receive full coverage in the event your business is involved in any auto accidents or damages.
New garaging location
You can expect insurers to ask where you park your vehicles during non-work hours, as the location of where your vehicles are garaged have a large impact on your rates.
The insurance industry will look at the city or town your garaging location is listed to help determine the rates on your policy. Everything from the location's population size, accident statistics, auto theft statistics, and more impact how much insurance providers will charge your business for a vehicle on your policy.
So, if you’ve changed garaging location recently, update your insurance agent or provider so they can be up to date on your business's current information.
New drivers
Who you have operating your business’s vehicles is another important factor that will impact your rates - as each employee hired will have their driving and claims history used to determine your premium.
Insurance companies will charge higher rates for any drivers they deem to be high-risk. This can include any drivers with traffic violations, accidents, suspensions, and other infractions they have on their record.
If you have recently hired any new drivers, or let a previous driver go, update your policy, get accurate rates and provide coverage for each worker. Interested in learning more about how you should choose the best drivers for your company? Check out our article on how choosing the right drivers affects your commercial auto insurance.
Keeping your policy up to date
Updating your insurance agency or provider on any recent changes made to your business's auto operations is a quick and easy way to guarantee your commercial auto insurance policy is providing you and your drivers with quality coverage with the correct limits and rates.
We understand that with the prices of everything on the rise (even insurance) that you likely want to know exactly where the cost of your business insurance policy is coming from. For our breakdown on all the factors that determine your business’s auto insurance policy, read this article: How Much Does Commercial Auto Insurance Cost in Massachusetts?
