Commercial auto insurance is primarily used by businesses who own and use commercial vehicles for work purposes. This insurance can also be purchased by individuals, however, so it is important to know what type of insurance you need and if you qualify for commercial auto insurance.
Commercial Auto Insurance vs Personal Auto Insurance
The main difference between these policies is that commercial auto insurance tends to have higher limits and requirements due to the risk associated with carrying people or equipment for work. As such, these policies may also have higher deductibles.
Choosing the wrong type of car insurance policy can leave you without compensation after an accident. Not only that, but vehicles insured with commercial auto insurance that are not used for work could lead to the insurance provider cancelling the policy.
Signs You Need a Commercial Auto Insurance Policy
You will need commercial auto insurance if you use a vehicle for work purposes. Commuting to and from work is not considered work purposes, however. Instead, work-related driving may include:
Transporting Equipment or Clients
If you regularly use your personal vehicle to transport equipment or clients, especially over long distances, you may qualify for commercial auto insurance. Not only would you need coverage for yourself and your passengers after an accident, but you may be expected by your employers to provide compensation for the equipment that was in transport. This could also include those who deliver items such as food.
Driving for Money
Ridesharing services are becoming more and more popular. Some of these services offer limited coverage for your vehicle while the ridesharing app is activated, but that coverage disappears once the app is turned off.
Use a Work Vehicle
Work vehicles or company vehicles, such as vans or trucks, should be covered under your employer’s commercial auto insurance policy. Before driving a company vehicle, make sure it is insured with commercial auto insurance, as your personal auto insurance policy won’t cover you or the vehicle in case of an accident.
If you own a business, make sure the vehicles used for work are insured with commercial auto insurance, otherwise they may not be covered. If your business requires employees to drive their own vehicles for work purposes, you should consider adding Hired and Non-Owned Vehicle insurance coverage to your policy.
When in doubt, shop around and speak with an insurance agent. It is crucial to choose the right insurance policy to cover your vehicle.