Commercial Auto Insurance in Texas

What is commercial auto insurance?

Operating motor vehicles comes with risks that businesses can ignore. When insuring their vehicles, Texas businesses normally need commercial auto insurance.

Commercial auto insurance helps cover commercially registered vehicles. Businesses usually need it for vehicles they own, and maybe vehicles they use but don’t own.

What Texas businesses need to purchase business auto insurance?

Texas state law generally requires vehicles to be insured. Almost all businesses that drive vehicles on public roads need some form of business auto insurance. 

The specific business auto coverages that state law requires are:

• Injury Liability of $30,000/person
• Injury Liability of $60,000/accident
• Property Damage Liability of $25,000/accident

Policies that provide only these minimum coverages are called 30/60/25 policies. Most businesses purchase much more coverage than what’s required. A single accident could greatly exceed the limits of a 30/60/25 policy, which would leave a business responsible for paying anything additional.

What coverages should businesses consider when purchasing business auto insurance?

There are many coverages that businesses should check for in a business auto insurance policy. Depending on a business’ specific situation and protection needs, important coverages might include the following:

What auto insurance coverages do lenders require?

In addition to the state requirements, businesses that finance or lease vehicles are frequently subject to additional requirements that lenders stipulate. Lenders commonly require comprehensive, collision and gap coverages. These are to protect the lender’s financial investment in a business’ vehicle(s).

What are hired and non-owned business auto policies?

When businesses use vehicles but don’t own them, a hired and non-owned business auto policy might provide sufficient coverage. These policies typically provide liability coverage but not property coverage for the vehicles used. If an employee is in an accident, the policy might cover injuries and damage to third-party property.

Businesses frequently purchase hired and non-owned policies when they rent vehicles, and when employees drive their own vehicles (e.g. for food delivery that a restaurant does itself). 

Before purchasing this type of policy, businesses should work closely with an insurance agent who specializes in commercial auto policies. An agent can help businesses confirm that a hired and non-owned policy is indeed sufficient for a particular situation.

When do businesses need commercial fleet policies?

Fleet insurance policies normally insure five or more vehicles. When insuring between one and four vehicles, a standard business auto policy tends to be best. This is another matter that a knowledgeable agent can help with.