Commercial Vehicle Insurance Requirements in California

Vehicle Insurance

The reasons for a commercial vehicle insurance policy are convenience and cost savings. Commercial vehicle insurance provides coverage for the liability drivers will have while operating a vehicle owned by a business. The policy covers vehicles owned by, parked at, or used in a business. Commercial vehicle insurance doesn’t cover vehicles used only to transport passengers or for any other non-business purpose or are privately owned or leased by the insured owner.

The requirement for commercial vehicle insurance is a logical extension of California law. Maintaining a policy for commercial vehicles (mainly trucks and buses) enhances risk management for any company because the company can better protect its assets against claims when accidents occur. It is essential to speak with an agent from a reputable insurance provider to understand more about the requirements for commercial vehicle insurance. Some of the general requirements are discussed below.

What are the Requirements for Commercial Vehicle Insurance in California?

In California, commercial auto insurance is required for all vehicles involved in a business activity or required for running a business. The following are the main requirements for commercial vehicle insurance in California.

Qualified-Insured Driver

Commercial vehicle insurance is needed not only for commercial vehicles to be insured but also for every person who operates a commercial vehicle. In California, motor carriers are required to ensure that all drivers are properly licensed and trained. For a California commercial vehicle insurance policy to be valid, the driver must be certified as a “qualified insured” by submitting documentation in the form of a vehicle historical record (VHR) or driver license record (DOLR).

This requirement is outlined through Section 1337 of the Insurance Code, which states that all drivers operating commercial vehicles in California must submit one of these documents each time they renew their insurance. The Certification process entails an administrative review of the information and documents submitted by the applicant before the issuance or renewal of any policy.

Proof of Vehicle Ownership

To qualify for commercial vehicle insurance, companies must prove they pay all the registration taxes, license fees, and annual inspections required by California law. When submitting proof of vehicle ownership, a company will receive a form from the DMV called a proof of insurance statement.

Meeting the Minimum Liability Limit

California state law states that each coverage’s minimum liability insurance requirements are as follows.

  • $15,000 for death or injury to one person
  • $30,000 for death or injury to two or more people
  • $5,000 for property/cargo damage

There are several reasons why a company may need to meet the minimum liability limits with the appropriate insurance. A commercial vehicle insurance policy would cover the cost of any damages caused by a crash, even if more than one person is involved. In addition, most California commercial vehicle owners have other insurance policies that may also cover their vehicles. It’s common for companies to have more than one policy, which would help them keep costs down.

Due to the unique nature of commercial vehicles and how they operate, commercial vehicle owners must maintain a constant awareness of the insurance coverage they need to ensure their vehicles are adequately insured. In addition to traditional coverage options, some companies offer specialized service packages with additional benefits such as anti-theft and mechanical coverage. These added benefits often include additional rates and deductibles, but they can help keep the business safe and protected by minimizing the costs of losses or repairs.

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