What Is The Difference Between Commercial And Personal Auto Insurance

Like other possessions, any vehicle you own must also be covered for accidents and damages. However, it is essential to find out which insurance is right for your needs.

Check out the differences between coverages to find out whether you need commercial or personal auto insurance.

Vehicle Usage

Vehicles that are used for business-related activities require a commercial auto insurance policy. When you are the sole owner of a vehicle and only use it for limited daily travel such as one or two job sites and commute, a personal auto insurance policy can also work for you.

Vehicle Owner And Driver

If a business owns your vehicle, you will need a commercial auto insurance policy. However, if a vehicle belongs solely to you, you can only own a personal auto insurance policy. The reasons why you use your vehicle and the frequency with which you do so influence the policy types you require.

You typically need a commercial auto insurance policy in the following cases:

  • If a vehicle is registered to the business
  • If an LLC or partnership owns your vehicle
  • If you or your employee lease or rent vehicles to carry out business activities
  • If a non-listed driver uses their vehicle for business purposes on your company’s behalf

Liability Limits

You generally require a commercial auto insurance policy for a higher liability business vehicle since it offers more limits than the personal policy.

Vehicle Weight And Type

If your vehicle is heavier than a standard-size vehicle, you’ll likely need a commercial auto insurance policy. Vehicles like these need special insurance coverage because they result in more damage when an accident occurs. Here’s what you need to consider:

  • Does any vehicle like utility vehicles, vans, or pickups, cross the gross 15,000 pounds weight?
  • Is any vehicle a semi or commercial trailer or a dump truck?
  • Does any vehicle carry catering equipment?
  • Does any vehicle have hydraulic lifts and suspensions?

Commercial Auto Insurance Policy Coverage

Commercial auto insurance primarily covers the following:

Physical Damage

The policy covers collision coverage for accidental damage to a company vehicle. Other damaging sources like theft require comprehensive coverage of this policy.

Liability

If you or a company representative driver causes an accident with people getting injured, the commercial policy will cover the people and the vehicle.

Medical Payments

Coverages in some states include bills for medical care that you need to provide due to a vehicle accident. As a result, commercial auto insurance covers your business for these expenses.

Non-Owned Hired Auto

When your employees cause an accident while driving their vehicle for company affairs, the non-owned auto takes care of the expenses your business would incur. On the other hand, hired auto takes care of business expenses resulting from accidents that you or your employees cause while driving a rented vehicle.

Uninsured Motorist

If an accident occurs while you or your employees are traveling by car for business, the commercial auto insurance pays for the medical bills and vehicle damage if the other responsible driver was insured.

Choose Your Insurance With All Things Insurance

Vehicle insurance is necessary because accidents and mishaps can occur at any time. It is essential to know which insurance you should choose for your vehicle depending on the criteria for both commercial and personal auto insurance.

All Things Insurance helps you choose the most appropriate insurance policy for your vehicle, which takes care of any damage the vehicle suffers and any medical bills that come from an accident.