Just like with personal auto insurance, states have varying requirements when it comes to commercial auto insurance requirements. Commercial vehicles generally must be insured with a minimum amount of liability insurance depending on the weight of the vehicle, the type of cargo being transported and other factors.
Basic car insurance requirements in Tennessee are the same for commercial vehicles as personal vehicles. All drivers must carry at least:
$25,000 in bodily injury liability per person
$50,000 in bodily injury liability per accident
$15,000 in property damage liability
Heavier vehicles and vehicles carrying hazardous materials are required to carrying higher limits of auto insurance. Commercial vehicles beneath 10,000 lbs. generally have to over at least $300,000 in liability coverage. Commercial vehicles carrying hazardous material may be required to carry anywhere between $1 million and $5 million in liability coverage. This depends on the nature of the materials and the distance being traveled.
Passenger carriers have different limits of liability risks. Passenger carriers that can fit 1-15 people require at least $1,500,000 in liability while passenger carriers capable of carrying 16 or more passengers must carry at least $5 million in liability insurance.
What is the Difference Between Personal and Commercial Auto Insurance?
Commercial auto insurance is geared specifically for vehicles owned or used by a business for work purposes. The line between these two coverages can be fine. A vehicle that is simply used to commute to and from work does not qualify for commercial auto insurance. In fact, if a vehicle is covered under commercial auto insurance that is not used for work-related purposes, an insurance company may cancel the policy.
On the other hand, a commercial vehicle that is only covered under a personal auto insurance policy may not be covered. Work purposes in relation to insurance include using the vehicle to frequently transport equipment or passengers, traveling between client destinations and more.
Commercial auto insurance offers a lot of the same coverages as personal auto insurance. Aside from liability, a commercial vehicle may be insured with:
Comprehensive Coverage: This coverage provides compensation for damage or loss of the vehicle in case of fire, hail, wind, falling objects, theft and vandalism.
Collision Coverage: Collision coverage provides compensation for damage or loss of the vehicle in case of a collision with another vehicle or object.
Medical Payments Coverage: This coverage helps with the medical expenses of the driver and their passengers after an accident.
Uninsured/Underinsured Driver Coverage: This coverage steps in after an accident involving a driver not carrying insurance.
Some businesses may also choose to purchase a Hired and Non-Owned vehicle insurance policy, which covers vehicles used or borrowed for work that are not owned by the business. This may also cover employee vehicles that are used for work.
How Much is Commercial Auto Insurance in Tennessee?
Costs for commercial auto insurance vary depending on several factors such as:
Distance being traveled
Claims history of the business
Size of the business
Driving record of the drivers
Coverage limits and deductible
Type, make, model and weight of the vehicle
All drivers on the policy may influence the cost of a commercial auto insurance policy. Business owners should make sure all potential drivers have extensive background checks.
On average, commercial auto insurance costs anywhere between $900 and $1,200 a year per vehicle. Businesses with fleets or heavy trucks will pay higher rates for commercial insurance than single policy holders. Vehicles that carry hazardous material cost more to insure, in part due to the additional insurance requirements for these particular vehicles.