The average cost of commercial insurance claims is more than 400% higher than personal insurance
Sheboygan, Wis., September 29, 2022 /PRNewswire/ — This year, Acuity Insurance — the only regional insurance provider — was rated A+ by both AM Best and Standard & Poor’s, with over 6 billion dollars of assets – has reported a more than 40% increase in the severity of its commercial motor liability claims.
Accidents are becoming increasingly expensive, driven by the increased cost of repairing and replacing vehicles and the impact of social inflation. This is happening just as people are taking to the streets again after a significant decline in the early years of the pandemic and the number of road accidents continues to rise.
“The data we’re seeing reflects the challenges facing not only insurance carriers but also business owners who could face high costs in the event of an accident,” he said Paige Nelson, Director of Product Development for Commercial Lines, Acuity Insurance. “Being cautious on the road and making sure your business has the right coverage are two of the simplest steps a business owner can take to protect their livelihood.”
According to the National Highway Traffic Safety Administration (NHTSA), the number of kilometers driven increased by about 325 billion in 2021 and the number of roads traveled increased The United States are more dangerous than ever. NHTSA estimates that road fatalities increased 10.5% in 2021 from 2020, the largest annual increase since 2005.
As accident severity and damage costs increase, it is imperative that businesses have the right coverage for their business vehicles and the right coverage limits. Here are five reasons why your business needs commercial auto insurance:
- Improve business protection. According to Acuity Insurance, the average commercial auto insurance claim is approximately 400% higher than the average personal auto insurance claim.
As repair costs continue to rise due to rising inflation and supply shortages, commercial auto insurance’s higher limits help ensure a company’s vehicle or fleet is covered and minimize unexpected expenses. Additionally, the rise of social inflation – societal, legal and regulatory trends that increase the cost of insurance claims above the rate of inflation – means businesses need to ensure they have the right coverage to protect themselves in the event of an accident.
Without commercial auto insurance coverage, a business owner could be forced to pay for these costs out of pocket, putting a serious strain on operations.
- Obey local laws. Commercial car insurance is mandatory in some places.
Many states require business owners to have a commercial automobile policy when using a vehicle for purposes related to their business. Failure to comply with these regulations can result in legal fees and costly penalties, so understanding government regulations and ensuring compliance are imperative.
- Increase policy protection limits. According to Acuity Insurance, the average per-accident limit for personal injury on a private auto policy is $500,000while the average personal injury limit on a commercial auto policy is 1 million dollars.
Compared to personal auto insurance, commercial auto insurance can offer business owners higher coverage limits, protect them from costly medical bills or damage, and give them peace of mind that their business is well protected.
- Keep your business running. Commercial auto insurance often allows policyholders to add rental refund coverage to their policy to ensure their business can continue to operate in the event of an accident.
This insurance provides business owners with rental vehicle coverage while their vehicle is being repaired, helping to keep their business running rather than a lost revenue stream following an accident.
- Protect your business from legal action. Commercial motor vehicle liability insurance can protect businesses from costly legal expenses if they are found to be at fault in an accident or damage and are sued.
These expenses can be disastrous for a small business, so having adequate coverage can help protect against the financial impact of a lawsuit following an accident. In addition, many insurance companies offer umbrella policies that offer business owners an additional layer of protection by expanding the coverage limits of commercial auto and other business insurance policies to provide the policyholder with broader protection.
For example, if an employee is involved in a serious accident involving another vehicle while on the job, the cost of repairing the damage and addressing legal issues may exceed a policy’s liability limits. An umbrella policy provides an additional limit of coverage on top of the commercial motor vehicle limit for better protection against the costly financial impact of the accident.
Working with a trusted and qualified insurance agent can help business owners determine their risks and whether they would benefit from commercial auto insurance – or if they are legally required to have one. Commercial auto insurance is comprehensive and usually customizable. With a single policy, entrepreneurs can get a wide range of protection against potential risks.
To learn more about Acuity Insurance and its commercial insurance offering, click here.
Acuity Insurance based in Sheboygan, Wisconsin, insures over 125,000 businesses, including 300,000 commercial vehicles, and nearly half a million homes and personal automobiles in 30 states. Acuity is rated A+ by AM Best and S&P and employs over 1,500 people.
SOURCE Acuity Insurance