Commercial auto insurance premiums for a plumbing business are a significant portion of their total insurance costs.
Your commercial auto premiums could be almost twice as much or more as that of your general liability insurance premium. And you can’t skip it: a plumbing business can’t function without a vehicle.
Commercial auto insurance is mandatory to operate a vehicle for business purposes. However, just as you can save on personal car insurance, so too can you find ways to cut the costs of plumbing insurance.
Do you want to save money on your premiums without compromising coverage?
Here’s how to shave down your commercial auto insurance cost so you can focus on what you do best: running your plumbing business.
5 Ways to Lower Your Plumbing Insurance Premium
1. Consider a Bundle
As a small business owner, you’ll also need liability insurance and other products. Some insurers offer better rates when you bundle all your insurance products together with the same company rather than buying them as standalone products.
You might be able to bundle your plumbing insurance together to include:
Insurance companies are more lenient with discounts when they have all your policies. We have one insurance company that has an extra discount for each policy you add. Contact your representative to see if bundling might save you money.
2. Review Your Policy
Commercial auto insurance comes with a huge number of options that aren’t mandatory, but are still good to have for many businesses. Consider reviewing your policy to find protections that may not apply to your business.
Your commercial policy will cover the mandatory liability that you need to legally operate your vehicle. It will at least be the minimum coverage required by the state. (However, we do not recommend having it that low.) From here, things become more complicated.
For example, who receives coverage and what cars they use varies by policy. A standard policy covers your employees and the cars you own. However, you may also receive extended coverage in the event your hire or borrow a car.
Additionally, you require extra coverage if your employees use non-company owned vehicles to complete business work. Without this coverage, employees must use their personal insurance policy even if they are on official business.
These are just a few examples of additional insurance products that many contractors find helpful. However, if you’re a one-person operation with no employees and no regular work with subcontractors, you may find some of these policies excessive.
Insurance companies typically charge high premium payments for lower deductibles. When you opt for a lower deductible, you pay less out of pocket for claims, which means the insurance company foots more of the bill. It makes up the discrepancy with higher monthly premiums.
Switching to a higher deductible helps bring down monthly payments to a minimum.
Taking the highest deductible usually saves money over the short-term. However, it’s also important to consider whether you can afford your deductible should you need to report a claim.
Choosing a $1,000 or $2,500 deductible does more harm than good if you don’t have an emergency fund to cover it. However, for a large fleet that small savings per vehicle can really add-up.
Alternatively, talk to your agent about adjusting your deductible according to coverage. For example, you might choose a lower comprehensive deductible and a higher collision deductible. Doing so minimizes liability, but allows you to save on repairs when required.
4. Pay Annually
Insurers often offer a discount to those willing to pay their premium in full at the start of the year. You might save 5% to 10% on your premium which is a big savings..
Ask about annual payments when you renew your insurance policy.
5. Ask for Discounts for Good Behavior
If you have stuck with the same insurer for years and not placed a claim, then you might qualify for discounts for being a good risk.
You need to ask for these discounts to get them. It’s also possible that your carrier started to offer new discounts since the last time you renewed, so the discounts didn’t show up earlier in the year.
Check Your Plan for Complete Coverage
Saving money on your commercial auto coverage is a noble goal, but you shouldn’t prioritize savings above coverage.
Your business provides you your livelihood. It is important to have enough coverage to provide you legal defense costs to defend your business and your future.
About Richie Buchanan
Richie Buchanan is owner of ISU Insurance and Investment Group.
"Our clients have the security knowing they are paying the RIGHT price for the RIGHT insurance coverage.
You will be confident that you made the RIGHT decisions for your insurance policies."
Richie is married to Susan and is the father of Jackson (4) and Evie (2).