Company Car Insurance

Company car insurance or business car insurance is a variety of automobile insurance. Any automobile accident entails risk of financial loss such as third party claims, vehicle repair costs, physical injury treatment costs, property damage compensation etc. Company car insurance therefore covers the liability arising on account of any loss of life of or injuries to the driver of its car, other company personnel, or passengers in the company's car when it met with an accident. Similarly, the company may also become liable to pay third party compensation, which includes compensation payable for loss of life, damage to the vehicle, other grave injuries etc., sustained by other parties directly or indirectly affected by the accident. In addition to these, the company can also recover the costs for repairing any vehicle damage due to such accidents. At times, the company's car may be a complete write off. In such cases, the company will be entitled to some amount that has been defined at the time of taking the policy. Apart from the liabilities associated with car accidents, there can be other forms of financial losses related to the company's car. For example the vehicle may be stolen, or it may be damaged due to any natural calamities such as tornados. At times, it may be washed away during any hurricanes. Even these losses can be covered through car insurance policies, and company car insurances are no exceptions.

Company car insurances may also be difficult to obtain. This is because different drivers may be used to drive company cars. Car insurance businesses start with an assumption that the drivers would not look after the vehicle. Insurance premium on company car insurance is therefore higher than the premium applicable on cars owned by individuals. Large companies generally own a fleet of cars. Such companies can therefore negotiate terms and conditions for the entire fleet and get a good bargain in the process. The value of the car is assessed to determine the applicable premium. The amount of claim allowed is almost always less than this value. Some car insurance businesses take into consideration the no claims bonus records of the drivers for fixing premium on company cars. Condition of the vehicle, year of purchase, and previous repairs are some of the factors that affect the premium charged for any company car insurance. Likewise, the state or calamity prone area in which the company is located affects the insurance premium. The security measures that are taken by the company to ensure that the vehicle is not stolen can also reduce or increase the insurance premium of any company car insurance policy.

The laws applicable to any automobile insurance are also applicable to company car insurance. Within the United States, different states have different laws relating to liability arising out of any accidents involving automobiles. Penalties vary for any failure to comply with such legal stipulations.

Car insurances are short-term policies. In general, the term is 12 months. If there is no accident or loss during this period, the amount paid towards the premium is totally written off. This can seem like a wasteful expenditure for a probability. But even though car accidents are not everyday events, and the probability of such accidents happening is remote, taking comprehensive company car insurance is always advisable. This prevents the company facing unnecessary litigation when it should be concentrating on its business. Likewise, the impact of any such accident on the cash flows of the company would be minimal with company car insurance. These car insurances also cover any losses due to destruction of or damage to company's products or material being transported through the company's car. In addition, charges towards company car insurances can be recorded as expenses for the year, effectively bringing down profits, and consequently taxes. This effect on taxes when considered in relation to the insurance premium may make company car insurance a monetarily acceptable concept. Many car insurance businesses also offer no claim bonus, which helps in making the deal attractive.