Commercial Auto Insurance vs. Personal Car Insurance
When it comes to drivers, vehicles, and purposes, personal drivers don’t have the same kinds of car insurance concerns as do businesses.
Businesses have much higher liability issues; as such, usually they have higher liability insurance requirements or recommendations. Generally, businesses deal with:
- Work gear.
- Other people and/or equipment.
Commercial car insurance is typically required to sufficiently cover the above.
Drivers Who Need Commercial Auto Insurance
You need commercial auto insurance if you use your vehicle for work or own vehicles operated by a business.
Commercial car insurance coverage isn’t just about big rigs.
Commercial vehicles actually can include what you might consider “regular vehicles,” such as:
- Pickup trucks.
- Sports utility vehicles.
It also branches out to some of the vehicles you might more closely associate with commercial work, such as individual or fleets of:
- Trucks including, but not limited to, dump trucks, box trucks, refrigerator trucks, bucket trucks, and catering trucks.
- Vehicles outfitted with work equipment.
- Utility vans.
- Limousines, taxicabs, and other livery vehicles.
- Rented or leased vehicles.
- Any vehicle owned or leased by a business, partnership, or other corporation.
Simply put, if you use a vehicle or vehicles for your profession or business (other than commuting to work), it’s likely you need commercial auto insurance.
NOTE: If you use your vehicle for work-related purposes and you aren’t sure if you need commercial auto insurance, ask your insurance agent.
What Does Commercial Auto Insurance Cover?
Basically, commercial car insurance covers the same major coverages private individuals purchase (usually at higher limits); however, there are many add-ons more suited for commercial driving, such as coverage for your:
- Employees, including fellow employee coverage and broadened and blanket policies that protect additional employees or people for whom your business is doing work.
- Equipment, including loading and unloading goods.
- Business, which protects your assets in the event of a lawsuit.
Your auto insurance specialist can inform you of your exact coverage needs based on your business and vehicle use.
How Much Commercial Auto Coverage Do You Need?
Generally, you must meet your state’s liability insurance requirements (which include bodily and property damage coverage). Understand that these coverage limits might be higher than they are for regular passenger vehicles.
If you don’t own your commercial vehicle(s) outright, your financial institution also might require comprehensive and collision coverage (which will pay for damages to your vehicle when you are at fault in an accident or the victim of non-collision events such as weather or fire).*
Aside from those coverages, you might consider additional types of auto insurance including, but not limited to:
- Uninsured/underinsured motorist insurance: This insurance protects you if you’re involved in an accident with another driver who has no insurance or not enough insurance.
- PIP and medical payments coverages: Personal injury protection (PIP) and medical payments coverages help take care of expenses incurred when you and/or your passengers are injured in an accident.
- PIP covers more than medical payments, such as wage loss.
- Emergency roadside insurance: Emergency roadside insurance helps you in the event you’re left stranded on the side of the road.
- It can include:
- Battery services.
- Towing expenses.
- Tire changes.
- Fuel delivery.
- Locksmith services.
- Personal effects insurance. Some insurance companies provide personal effects coverage that takes care of your or your employees’ personal belongings in the event of theft. Usually, this coverage is up to a certain dollar amount.
These are just a few suggestions. Your auto insurance provider will explain the appropriate coverages and whether they’re required or available in your state.
How to Purchase Commercial Auto Insurance
Basically, you’ll purchase commercial car insurance coverage the same way you’d purchase regular vehicle insurance:
- Decide whether you’ll work alone, with an agent, or with a broker.
- Generally, insurance agents focus on one insurance company, while brokers can research several different providers for you but may charge a broker fee.
- Compare several auto insurance providers. Look at factors such as their financial standings and customer service feedback.
- Never look at just one provider; always compare at least three quotes.
- Discuss coverage requirements (liability insurance) and optional coverages.
- Choose the provider that offers the best coverage for you at the most affordable rate.
- Purchase your commercial auto insurance plan.