Commercial Vehicle Insurance

Commercial Vehicle Insurance

Minimum Requirements in Texas

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All drivers in Texas must prove financial responsibility for any potential accidents they might cause. Financial responsibility is often another way of saying "liability insurance," although there are other ways to comply with the requirement.

Ways to Establish Financial Responsibility

Typically, drivers in this state get a vehicle liability policy.

The following list covers all your options for adequately proving financial responsibility:

•Get auto liability coverage from an insurance provider licensed to do business in Texas.

•Obtain a surety bond and submit it to your county Clerk. The bond requires the signature of two people, who must be property owners in the state.

•Deposit $55,000 in cash or securities to the county comptroller.

•Deposit $55,000 in cash or cashier's check to the county judge.

•Submit a certificate of self-insurance with the Texas Department of Transportation (Tx DOT). This option is only available if you own more than 25 cars.

Determine Whether You Need Commercial Insurance:

You have a range of factors to weigh before you decide what type of insurance you need. Consider the following:

•How many vehicle(s) you need to insure

•The kind of vehicle(s)

•How the vehicle(s) is being used

•Who drives the vehicle

•Who owns the vehicle

Here's the bottom line: If you own vehicles that are for business use only, it's wise to get a commercial auto policy. If you use your own car for both business and personal activities, or if you have employees who also use their cars for business and personal activities, that's where the line becomes a little blurry.

For instance, if you have a floral delivery business with three cars that your employees drive, you'd probably want commercial insurance policy to cover the multiple drivers and business-use-only vehicles. But, if you're a private physical therapist and you use your own car to make house calls, a personal liability policy might be sufficient.

Here are some other cases that might require commercial insurance:

•Your business is primarily transporting products or people.

•Your business employs multiple people who drive your business's multiple vehicles.

•Your cars or trucks have equipment for business use only that can't be removed from the vehicle.

•You wish to insure the workers that either use your business vehicles or drive their own cars for business purposes.

•You want liability coverage at a higher amount than a personal policy offers.

Remember, you can contact an agent or Tx Dot for assistance determining whether you need commercial insurance.

Determine the Required Amount of Coverage-

Once you decide which type of policy you're getting, you'll meet with an insurance agent and discuss the following:

•Who owns the vehicle(s)

•Weight of the vehicle(s)

•Usage of the vehicle(s)

•Liability limits requirements

Texas has set a minimum amount of liability coverage, and that's 30/60/25. That means each vehicle you own is covered for the following amounts:

•$30,000 bodily injury coverage for one person in a single accident

•$60,000 bodily injury coverage total per accident

•$25,000 property damage coverage per accident If you need more information about the choice between personal and commercial auto liability coverage, you can call TxDot to discuss your specific situation.

Purchase a Commercial Policy

There are many providers in Texas, so you have quite a selection to choose from. Some providers specialize solely in commercial auto insurance, and others offer a wide variety of policy types, including the commercial policy you need.

Proof of Insurance and Financial Responsibility

Texas lawmakers have instituted a program with Tx DOT―and other state agencies―called Texas Sure. This program streamlines the insurance verification process for Tx DOT, requiring state insurers to electronically submit weekly reports of new policies, cancellations, and non-renewals.

Electronic Reporting

Depending on what type of commercial auto insurance you get, your insurance provider might or might not submit your information electronically. This is simply because the Texas Sure program matches VIN numbers to policies. If your commercial policy is a blanket policy―meaning it covers any and all vehicles for your business without designating each specific vehicle on its own―it will not include VIN numbers of the insured vehicles and therefore cannot be sent electronically.

Talk to your insurance provider to confirm that the information was sent by other means. If it wasn't, you can easily send in the information yourself.

Electronic reporting makes it even more important for you to maintain insurance coverage. If it lapses for any reason, TxDOT could find out immediately.

Penalties for Failure to Maintain Financial Responsibility

Letting your insurance lapse, especially on a commercial policy, exposes you and your business to great financial risk. It also brings on other penalties, including suspension of your driver's license and the registration of each uninsured vehicle.

If you feel the suspension was done in error (for example, you had coverage but TxDOT had no proof of insurance for you), you can appeal within 20 days. Contact TxDOT at the number listed on your notice of suspension.

A second insurance lapse will cause your vehicles to be impounded for 180 days. You'll also have to pay impound fees of $15 per vehicle, per day.

Reinstatement of Registration and Driver's License

To lift the suspension(s):

•Provide proof of current liability coverage.

•Pay reinstatement fees from $175 to $350 per vehicle.

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Battistone Insurance Group

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mark@battistoneinsurancegroup.com

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