Small Business Insurance
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Commercial auto insurance in Arizona - Pie Insurance

Commercial auto insurance in Arizona - Pie Insurance

Arizona commercial auto insurance 101

Arizona ranks second in U.S. job growth, boasting 550,000 small businesses that employ nearly half of the state’s workforce. The state also ranks second in workforce quality and availability.

Do you own a small business in Arizona? If so, you may need commercial auto insurance, which protects your business and your business vehicles. Although your employees always strive for high standards of safety, accidents can still happen.

What do Arizona small business owners need to know about commercial auto insurance?

In Arizona, you’re required to carry commercial auto insurance to cover and protect your small business should any collision or auto damage occur.

Having insurance protects your small business when a company-owned vehicle is involved in a collision or is otherwise damaged. Typically, coverage includes company-owned vehicles, but it can also include personal vehicles used for business.

If your Arizona business owns more than nine vehicles, you may be able to obtain self-insurance or a certificate of deposit if you express financial responsibility. These options tend to be more challenging, so it’s typically safer and easier to purchase commercial auto insurance.

The type of insurance you need will depend on the dimensions and intended uses of the vehicle, as well as other factors outlined below.

Read on to learn what you need your commercial auto insurance to cover, as well as how to protect your employees and your small business in the case of a car collision or other business vehicle accidents.

What does commercial auto insurance cover?

Commercial auto insurance protects your business from any liabilities created by work-related vehicular accidents. It also protects your assets and drivers.

A typical commercial policy in Arizona can include:

Property and injury liability

This insurance is meant to repair any damage caused by your business’ vehicles. It’s required by law in Arizona to have this coverage. It can also be used toward coverage of the damaged party’s medical bills.

Collision insurance

This insurance covers any repairs needed from damage to business-owned vehicles, regardless of who was at fault during the collision.

Comprehensive insurance

This type of insurance is often known as coverage for “everything other than collision.” This can include any damage to your vehicle that wasn’t a result of an accident, including wildlife damage, a fire, etc.

Underinsured and uninsured drivers

If you or one of your employees is involved in an accident with someone who’s underinsured or doesn’t have car insurance, you may find it challenging to pay for the vehicle repairs and potential medical bills the collision may have caused. This coverage helps pay for those expenses.

5 essential facts about commercial auto insurance in Arizona

  • You need commercial auto insurance if:
    • Your business owns or leases vehicles
    • A vehicle has a commercial license plate, registration, or tag
    • A vehicle is a necessary part of your small business operation, such as a taxi or delivery vehicle
  • The cost of your commercial auto coverage will differ depending on:
    • The size of vehicle(s)
    • The number of vehicles
    • Typical travel radius
    • Frequency of use
    • Geographic location and any potential unique risk factors
    • The type of business you’re conducting
  • Using a company vehicle can give you tax benefits. It’s a valuable tax-free fringe benefit for business owners and employees of small businesses.
    • As an employer, having auto insurance can give you a tax deduction
    • If you buy a vehicle for yourself to use for work, you can’t itemize any deductions on your taxes. Outlays for driving the car for business purposes would not include reimbursement
    • Under the Tax Cuts and Jobs Act, employee business expenses are non-deductible until 2025 because you can’t itemize miscellaneous deductions
    • Also, if you’re buying and paying for a vehicle yourself, you can’t deduct interest payments from your taxes
  • Common vehicles covered by commercial vehicle insurance in Arizona include:
    • Cars
    • Pickup trucks
    • Commercial trucks
    • Semi-trucks
    • Delivery vans
    • Passenger vans
    • Buses
    • SUVs
    • Tractors
    • Hearses
  • There are a few instances in which you’ll need to update your vehicle insurance policy, including:
    • When an employee covered by your auto insurance leaves or is terminated
    • When you hire a new employee who’ll be driving a company-insured vehicle
    • When an employee is involved in a collision or accident
    • When an employee receives a motor vehicle citation (ticket)
    • When your business buys a new vehicle
    • When your business sells a vehicle
    • Note: Keep your insurance agency aware of any of these changes, as they can affect your auto insurance policy

Thinking about auto insurance for your business?

Owning a business comes with risks, as does operating a vehicle. Together, you’re facing greater risk as a small business owner. Even the safest driver can find themselves in circumstances out of their control, and no one wants to be stuck paying the cost of repairs from their own pocket.

Commercial auto insurance can help you avoid this outcome and keep your small business running smoothly, even when accidents happen. Need commercial auto insurance for your Arizona small business? Get a quote!

Thanks for reading! Please note that this content is intended for educational purposes only. As best practices change regularly, you should refer to your trusted advisor for specific counsel.