Blog

Personal vs. Commercial Auto Insurance

For most small businesses, owners or employees will use their personal cars to perform work related duties such as transporting equipment, delivering goods, or even driving clients to and from destinations. Most owners and employees have personal coverage for their cars, however, when is it appropriate for them to have commercial auto insurance coverage?  In this piece, we will focus on the needs or situations that will make you opt for either personal or commercial auto insurance.

Understanding Your Needs for Auto Insurance

As much as the two types of insurance protect you against a loss, there are key things that you should consider when researching the type of coverage, you need. We’ll go over these items in more details, but these things include:

  • The named insured: for instance, the owner of the vehicle that the insurance is covering. It can be you or your business.
  • The scope of how you use your vehicle will also determine whether you need commercial or personal auto insurance.
  • The level of liability attached to your vehicle; either high or low.

Who Is the Vehicle Registered to?

Out of the 3 points listed above, this question is the most obvious in determining whether or not you need commercial auto insurance. If your vehicle is partnership or corporation owned, registered to a business, leased to others, or other employees/nonregistered drivers are using it, then you need commercial auto insurance. With commercial auto insurance, you are protecting  you and your employees while driving the company vehicle.

It is good to note that commercial auto insurance does not only protect you and your car, but it also protects:

  • The property and trailer
  • The equipment that you have attached to your vehicle or those that you use with it
  • The additional insured requirements
  • Against the loading and offloading exposure

Which brings us to our next point…

What or Who Are You Transporting?

In case you are using your car to carry equipment to work, visit job sites, and deliver goods or conduct taxi services, transport inflammable materials, offer truck/freight transportation and hire it to tow other vehicles, you need commercial auto insurance. This comes about because there is an increased liability and risk of damage that need some extra compensation when there is an accident.

But if you are grabbing some food for your co-workers, taking your friends to a concert, or going for rides or road trips, a personal auto insurance policy is all that you’ll need.

However, if you are using your personal vehicle for rideshare gigs then you’ll need a special type of coverage that is different from personal or commercial auto insurance. Visit our web page to learn more about the special Rideshare Coverage.

Consider What You Are Liable For

Unlike personal auto insurance, commercial auto insurance becomes so helpful when you regularly drive to meet and transport clients. The massive movement in this scene increases risks and liabilities which need a cover in case there is an accident.

So when you sit down and determine that your vehicle treads on high liability, you’ll find that commercial auto insurance coverage is what you’re needing.

Also, in terms of liability, commercial auto insurance has high liability limits which makes it good to use your vehicle for:

  • Driving your clients or employees
  • Transporting goods and equipment
  • Getting a payment after performing a certain service
  • Towing a trailer for business
  • Hauling heavy, work-related loads

Approach Your Insurer to Take the Right Insurance

At most times, you need expert analysis and guidance on your existing insurance policy before modifying it to suit your current endeavors. When you realize that your vehicle is so much into business, and you have personal auto insurance, quickly visit your insurer for guidance on how you can modify it to be a commercial one.

For more on auto insurance and to get auto insurance that fits your budget, contact us and speak with one of our representatives.

Get a Quote the Way You Want

click

Online

Start a Quote

phone

By Phone

773-847-9000

in-person

In Person

Find a Location