Commercial auto insurance: what you need to know

If you don’t operate a business vehicle fleet or operate a business at all, you may never have thought about commercial auto insurance. But you may need to be covered by a commercial policy in addition to a personal policy, especially if you use your own vehicle for business purposes other than commuting.

If you are self-employed or own a small business using your car for work, you are required to have commercial coverage. However, if you regularly use your car for an employer, it is their responsibility to insure it for professional driving whether or not they own the vehicle.

Here’s how to know when a commercial auto policy makes more sense than just getting personal auto insurance quote.


What is commercial auto insurance?

Commercial auto insurance covers vehicles used for business purposes, whether by you or an employee. All expenses related to an accident resulting from personal injury, death or property damage are covered up to the limits of the policy.

Commercial auto insurance is sometimes confused with carpooling insurance, which is generally required if you are a carpooling or delivery driver.

A commercial auto insurance policy typically includes:

  • Liability coverage, including liability for bodily injury and property damage, to pay for injury, death or property damage if a driver causes an accident on the job. This coverage may also pay legal fees.

  • Medical payments, without fail or injury protection, to pay the medical expenses of the driver and any passenger in the event of an accident, regardless of the fault.

  • Coverage for uninsured motorists to pay for injuries and sometimes property damage caused by an uninsured or hit-and-run driver. This coverage may also include underinsured motorist coverage if the driver at fault does not have sufficient auto insurance coverage to cover all expenses.

  • Full coverage and collision to pay for damage to the vehicle caused by theft, vandalism, flooding, fire and damage if a work vehicle is struck by an object or another car.

Commercial policies may include other coverage, such as towing and labor, rental reimbursement, and rental variance coverage, but they generally do not cover tools or other items you are carrying around. vehicle. A business owner’s insurance policy is required to cover company-owned tools, while a home or renters insurance policy covers personal effects in the vehicle.

Who Needs Commercial Auto Insurance?

If you only use your car for occasional business purposes, your personal policy may provide sufficient coverage. But if you regularly use your car for work, except daily commutes, you will need a commercial policy, including if you are self-employed or a small business owner.

You will likely need a commercial policy if you:

  • Drive for money. Driving friends to a concert or buying food for a colleague is covered by a personal policy, but not the transport of people or goods for money.

  • Log in to high mileage for work, such as regular visits to stores or construction sites.

  • Transport items for work purposes, such as tools or heavy equipment.

Check out the scenarios below to see when you might need a commercial font and when a personal font is sufficient.

Commercial auto insurance

Grab morning donuts for coworkers.

Delivery of pizzas to paying customers.

Driving friends to a concert.

Drive clients to a work event.

Take weekend car trips.

Drive on several sites per day.

Go to the construction site where you are working.

Transport of tools and equipment to the construction site where you work.

Frequently Asked Questions

Although business and personal policies have similar coverage, there are some significant differences. Commercial auto policies are generally tax deductible and have a higher rate liability limits because company vehicles need more protection. They can also cover non-company vehicles, such as if an employee drives their own car for work.

Commercial auto insurance is generally more expensive than a personal auto insurance policy. The cost may depend on the type of vehicle, the driving record of all drivers, the use of the vehicle, the auto insurance coverage options purchased and other factors.

Most well-known insurers offer commercial auto insurance, including Geico, Progressive, State farm, Allstate and Mutual Freedom. Because policies are generally more expensive than personal auto coverage, getting multiple quotes is the best way to find affordable rates.

About Eric Harris

Eric Harris

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