Commercial Auto Insurance: What you Need to Know

July 7, 2019

If you drive a vehicle for business purposes, your personal auto insurance won’t cover damages or losses. You need commercial auto insurance whether you drive a car, van, or truck. Insurance companies face different risks when you drive a vehicle for business purposes.

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Keep reading to learn more about commercial auto insurance to determine if you need it.

The Definition of Commercial Auto Insurance

Commercial auto insurance covers vehicles while in use for business purposes. This includes your personal vehicle if you use it to conduct business. Like your personal auto insurance, commercial car insurance covers the car from accidents, theft, or weather damage (depending on the policy you purchase).

What’s Included in Commercial Auto Insurance?

Most commercial car insurance policies include the following types of coverage:

  • Property liability – Coverage for damage to another person or business’ property from your business vehicle
  • Body liability – Coverage for damage to another person(s) as a result of an accident with your business vehicle
  • Medical payments – Coverage for you and any passengers in your vehicle should you require medical attention (it doesn’t matter who was at fault)
  • Comprehensive – Coverage for damages to your vehicle that occurs from something other than a collision, such as theft, vandalism, or weather damage
  • Uninsured Motorist – Coverage for your property and/or body for damages caused by another driver that doesn’t have insurance coverage

The coverage options are similar to what you could get on your personal auto insurance, but they cover the cars used strictly for business or personal cars used during business hours to conduct business.

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How do you Know if You Need Commercial Auto Insurance?

If you use your personal car for business purposes, you should talk to your insurance company about the need for commercial auto insurance. Certain instances, for example, occasionally meeting clients during the day, may not require commercial car insurance. But if any of the following apply, you should look into business insurance for your car:

  • You use your personal car daily for business purposes
  • The business owns your car
  • Anyone else working at your business or place of employment drive your car

Other reasons you may need commercial auto insurance include:

  • Your vehicle carries equipment
  • You transport hazardous materials
  • You hire your truck or car out for towing or transportation purposes
  • You deliver goods
  • You transport people

The Difference Between Personal and Commercial Auto Insurance

Besides the fact that commercial car insurance covers vehicles while in use for business, business car insurance has other differences from personal auto insurance:

  • Higher coverage amounts
  • Covers commercial and fleet vehicles
  • Provides more legal protection should you cause an accident

Commercial auto insurance typically costs more than personal auto insurance because of the higher liability for the insurance company, but the benefits greatly outweigh the costs.

If you are unsure if you need commercial auto insurance, ask your insurance agent. Finding out after an accident that your insurance doesn’t cover you can leave you with major financial liabilities. Instead, knowing upfront what you need can help you protect yourself. Just like with personal auto insurance, you have many coverage options. Discuss them with your insurance agent to ensure that you have adequate coverage.

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