DEFINITION OF COMMERCIAL VEHICLES
In Depth: Commercial Vehicles on the Business Auto Policy
Equipment categorized as commercial vehicles are one of three distinct types of rate groups used when writing business auto insurance. We categorize and rate commercial vehicles on a business auto policy using three primary designations: Service, Commercial, Retail.
Commercial vehicles on the business auto insurance policy are vehicles that are normally vehicles that work. This includes larger trucks, usually, that carry or deliver product from location to location. The distinction that is important is that the vehicle is a working vehicle, as opposed to service vehicles that carry passengers to and from work sites. An example might be a dump truck. The primary role of the dump truck is the carry materials that are dumped on construction and job sites. Although the truck carries a driver, the driver operates the truck so that it performs its work. Another example might be a delivery vehicle from the local retailer that carriers your new appliances to the house. A fire truck is classified as a commercial vehicle when we rate the insurance. In the case of commercial vehicles, both straight trucks and truck-tractor-trailer combinations are considered working trucks. Tractor-trailer combo units are not usually used separately except in those cases where a trailer is dropped and the tractor operates back to its depot without the trailer. However, the purpose of all vehicles rated for the “commercial” classification are trucks that perform work. Service vehicles carry men and supplies to job/work sites. Retail rated vehicles deliver retail goods to the end purchasing consumer.
Typically, commercial vehicles on the business auto policy form are vehicles that weigh in excess of four tons. This is not a hard rule. Smaller vehicles can be rated as “commercial” classified vehicles but usually service vehicles are smaller and more ubiquitous. There is no weight limitation to a service vehicle but they usually will not weigh over 4 tons.
We generally rate a vehicle as “commercial” when setting the rate based upon the type of work it does. It is uncommon for vehicles rated in the “commercial” category to have more than one role. Service rated vehicles, on the other hand, may occasionally have two roles. The example given in another section explained how a pickup truck – rated as a service vehicle – can also be used as a working truck when plowing snow. We rate a vehicle either Service, Commercial, or Retail based upon the work it does a majority of the time.
This information is a general guide and will help you understand why vehicles develop different rates within your business auto policy. Commercial vehicles vary greatly but you shouldn’t worry about how they are classified. That is my job and I’m here to help you figure out how to get the best commercial auto insurance rates for your business vehicles. I have nearly forty years (40) of experience and I can help you make it all make sense. Call or stop by. I’m here Monday through Friday, from nine to five, most days. I offer appointments at most other times by advance appointment.