Commercial vs. Personal: Do You Need Commercial Auto Insurance?
Figuring out if you need commercial or personal auto insurance can be confusing, especially if you use your vehicle for business and personal errands.
We can help you understand the differences between commercial and personal insurance so you can find the best option for your business. Answer a few questions and read more to learn whether a commercial or personal auto policy is right for you.
Commercial vs. personal auto insurance
Commercial and personal policies both protect against lawsuits, bodily injury, property damage, and other issues. That said, commercial auto insurance typically has higher limits and covers more complex claims.
Here are some things to consider when deciding what kind of insurance policy you need:
Who owns and drives the vehicle: If the vehicle is in your business’s name or your employees drive it regularly, you’ll probably need commercial auto insurance. Some sole proprietors might get the protection they need with a personal auto policy, but it can depend on their profession and vehicle use.
How the vehicle is used: How often you use the vehicle and what you use it for can determine your policy type. Commercial auto insurance might be the best fit for your business if you travel to various jobsites, carry tools and equipment, or make deliveries. However, sole proprietors who use their vehicle to commute might only need personal auto insurance.
The type and weight of the vehicle: You’ll need a commercial auto insurance policy if your vehicle is heavier than a typical pickup or SUV, like a dump truck, semi truck, or commercial trailer. Heavy duty vehicles can cause more damage if they’re involved in an accident.
Required business liability limits: If your business vehicle requires higher liability limits, you will typically need commercial auto insurance. This additional protection can help your business in case of an accident or other claim.
Common questions about commercial and personal auto insurance
Does commercial auto insurance cost more than personal auto insurance?
Yes, usually. Business auto insurance often costs more than personal auto insurance because it has higher liability limits and more coverage in case of an accident.
Learn more about commercial auto insurance cost, and start a quote to find out what you can expect to pay.
Can my personal insurance cover me for business use?
It depends. A personal auto policy can provide enough coverage for some businesses, especially if you primarily drive for personal use.
But if you require specific commercial auto insurance coverages and high liability limits, personal auto insurance probably won’t cover you. You might also need a commercial policy if you operate an unusual vehicle, haul special equipment, transport goods or people for a fee, or have other special needs.
For example, an accountant traveling to business meetings usually won’t need a commercial auto policy, unless the car is in the business’s name. However, a contractor might need a commercial policy because they haul tools and equipment that are necessary for work.
Does commercial auto insurance cover personal use?
Yes. Though personal auto insurance typically doesn’t cover business vehicles, commercial auto insurance can cover you for both commercial and personal use.
Do I need both commercial and personal auto insurance?
No. Commercial auto insurance can cover both business and personal use. Separate personal auto insurance isn’t usually required if you have a commercial policy.
Dan Zeiler
dan@zeiler.com
877-597-5900 x134