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Commercial auto insurance is one of the most important aspects of your business insurance program. If your business uses a vehicle, or many vehicles, you need commercial auto insurance and you will want to ask your business insurance professional some important questions. You will also want to provide your business insurance professional with a complete picture of your vehicle use.
Consider the following points and ask the following questions.

How Many Vehicles and Drivers Will the Business Insure?

Commercial auto insurers often separate coverage types based on the number of vehicles and drivers to be insured. Fleet insurance is an option for businesses that will have a number of vehicles and drivers. The number of vehicles differs with each insurer and may depend on the class of vehicle. But, fleet insurance may be a less expensive alternative than individual, per vehicle policies.

What is the Policy Definition of Commercial Use?

Your personal auto policy will exclude coverage for commercial uses of your vehicle. A commercial policy will establish a definition of commercial use as well. It is important that you read the definition and discuss this with your insurance professional. If there is any question, it is better to obtain a commercial auto policy so that, in case of an accident, there is no chance of being uninsured.

How Can You Lower Premium Costs?

Commercial auto business insurance premiums can be lowered by:

  • Business Location – the location of the vehicles determines premiums for theft.
  • Driver Records – hire only qualified drivers with safe driving records.
  • Choice of Vehicle – sales people may want sports cars, but five-star safety rated, domestic, mid-sized sedans have the lowest premiums.
  • Deductibles – can your business afford part of the risk and maintain a high deductible? If so, your premiums will be lower.
  • Safety and Anti-Theft Devices – alarms, GPS tracking, air bags, seat belts, and other such devices can significantly lower premiums.

Special Commercial Coverages and Considerations

Certain businesses must adhere to federal and state regulatory standards in the operations of their vehicles. For example, if your business will be hauling cargo interstate, there are specific Department of Transportation requirements for insurance that must be met. You will need to make sure you and your insurance professional have a thorough understanding of those requirements. Also, if you will be delivering or hauling for others or using other’s equipment such as leased trailers or rental equipment, you will need hired or non-owned vehicle coverage.

Who is the Insured?

Make sure you know the insured. Sound simple? Maybe. But, all to often businesses set up a leasing company to lease equipment to the main company and the leasing company is the titled owner of the vehicles. A common mistake is to identify the main company and not the leasing company as the titled owner on the policy. Or, the dba of the company and not the full name of the company is listed. You want the full name of the company as an insured, the titled owner, any affiliates, and dba, and all employees as insureds on your commercial auto policy.

Here are some Frequently Asked Questions about Massachusetts Auto Insurance:
Q. How do I cancel my Insurance/Delete a vehicle?

A. Whether you sell your vehicle, or take it off the road, you need to turn in your Massachusetts (MA) plates to the Registry of Motor Vehicles and forward to us your Plate Return Receipt. For your convenience you can bring them in to our office and we can cancel them for you. If you move to another state, you must make arrangements for new plates and insurance in that state within 30 days then return your MA plates to us in order to cancel your MA policy.

Q. When do I have to add my son/daughter to my Auto Policy?

A. Your son/daughter needs to be added when they receive their driver’s license. Note they do not need to be added while they drive on a learners permit. Once they pass their license exam, please contact our office with their license number.

Q. Who should be listed on my MA Automobile policy?

A. All household members with driver’s licenses must be included on your policy as well as any customary operators. A customary operator is anyone who uses the vehicle on a regular basis whether a household member or not.

Q. When I rent a vehicle while on vacation, do I need to purchase the rental companies insurance?

A. Your MA Automobile Policy does follow you in the continental U.S., Puerto Rico & Canada as long as your vehicle is left at home and not driven while you are traveling or on vacation. However, we do recommend you purchase the coverage for the following reasons:

1.     The Collision and Comprehensive deductibles on your own policy apply unless you purchase the rental company coverage which will waive your deductible.
2.     In the event of an accident your MA Automobile Policy does not cover “loss of use” of the rental vehicle while it is being repaired.
3.     If you do not carry collision and comprehensive coverage.

Q. Do I need towing if I have AAA?

A. The basic AAA membership only allows a certain number of miles per tow. Your MA Automobile policy offers two limits of coverage $50 per disablement at a cost of $8.00 and $100 per disablement at a cost of $16.00 (these are annual premiums). Please note this coverage is a reimbursement not an actual towing service like AAA.

Q. I moved, what should I do?

A. Contact us with your new address and you also need to contact the Registry of Motor Vehicles to change both your drivers license as well as your vehicle registrations you can do this on line at www.mass.gov/rmv or we can send you a card to complete and mail to the Registry.

Q. What discounts are available for the MA Automobile Policy?

A. Each company offers different discounts they include but are not limited to Low Mileage, Multi-Car, Anti Theft, Senior Citizen, Public Transit, Group Discounts, Account Credits, Good Student, Student away at school (if over 100 miles), Hybrid Vehicle, Pay in Full, Loyalty Discounts, Advanced Driver Training and more.

Q. Should I keep a copy of my MA Automobile policy in my vehicle?

A. If you are traveling with your vehicle out of state, or in Canada, we do recommend that you keep a copy of your Insurance Policy with you.

Q. I no longer want my Social Security number on my MA Driver’s license, how do I change it?

A. You can log onto www.mass.gov/rmv and go to the Replace Your Driver’s License section. The registry will send you a replacement license with a state assigned “S” number.

Q. How does my odometer reading effect my insurance rates?

A. With the new Massachusetts Managed Competition odometer readings are an important part of your rates. Your odometer reading comes directly from your MA safety inspection; therefore it is of the utmost importance that this information is accurate.

As such you should always verify with your service station at the time of the state inspection that the odometer reading they enter is accurate… It could save you money!

More information can be found at https://www.fyins.com/

How Much Coverage Do You Need?

Some financial planners say you need enough life insurance to replace five to seven years of your salary. If you have young children or significant debt, you should bump up your coverage so you have enough to replace as much as 10 years of your salary, they say. That would mean a person making $50,000 a year should have anywhere from $250,000 to $500,000 worth of coverage or more.

Remember, the sole purpose of life insurance is to replace your income in case you die, so that your dependents can maintain their current lifestyle.

Factors to consider include whether the surviving partner will have child care expenses if one partner is out of the picture. Do you have other assets on which to draw? Will your children be out of the nest soon? These, and many other factors, influence the decision on how much coverage you need.

Buying a whole-life policy doesn’t necessarily mean you are fully insured. Because of the investment component of whole life, the policies are much more expensive than term. Don’t simply buy less coverage, as it defeats the purpose of buying insurance in the first place: to cover dependents.

How Long A Term?

Agents like to talk about policies you can keep throughout your life. What they sometimes won’t tell you is that you don’t need life insurance coverage throughout your life.

The secret to buying a policy with the right term is figuring out how long you need to be insured. You start by estimating when your children will be out on their own and no longer in need of your financial support.
So if your children are 3 and 5 now, you’d probably want a policy that covers you at least until the youngest is 22, so that’s about a 20-year term. But this depends somewhat on your age as well.  Say you also want to cover your spouse for your lost income until what would be your normal retirement age, 65, and you’re only 35 now. Then you would want a 30-year policy.  Keep in mind that insurance gets very expensive as you leave your 50s. So you may pay more to cover yourself until 65, even if you lock in a level-premium, 30-year policy when you are 35. Coverage past age 70 or so may be unattainable.

Life insurance is not a substitute for a retirement plan. You want to plan so that you’ll have enough to live on when you retire, and you won’t have to keep paying insurance premiums.  There are exceptions, however. People who start families late in life, or who have complex estate-planning issues, may well have a need for life insurance beyond the customary retirement age.

One more thing: Steer clear of so-called mortgage insurance policies, which pay off the balance on your mortgage if you die. The problem is that you are paying for a steadily declining amount of coverage, as you pay down your mortgage. It’s best to include the mortgage payments in your calculations when determining how much coverage you need.