Auto insurance is compulsory for everyone in the United States who drives. What Insurance Do You Buy?
One more example: if you drive your car for regular personal errands and commuting, a normal private auto insurance policy should suffice.
But things are murkier if you use your car for business. If so, you may consider commercial auto insurance requirements.
Differences Between Personal and Commercial Auto Insurance
In this article, I am going to share the differences of personal and commercial auto insurance by researching and collecting information from trusted sources over the world.
For Every Drivers: Personal Auto Insurance
Whereas, personal auto insurance is meant for people who use the vehicle they own for individual purposes like:
- Commuting to work
- Running errands
- Leisure travel
Included under this kind of coverage will typically involve:
- Liability insurance: In case you cause damages or injuries to others during an accident.
- Collision coverage: It pays for damage on your car that occurs from crashing into another object.
- Comprehensive coverage: Your vehicle is protected against non-collision events like theft, vandalism or weather damage.
- Uninsured/underinsured motorist coverage: This applies if the driver who rammed into you doesn’t have enough insurance to take care of your damages.
What one must bear in mind is that personal auto policy has its limits. Such insurances do not usually cover business usage for instance if while going for a meeting with a client you get involved in an accident, there may be no protection offered by your personal policy.
Business on the Move: Commercial Auto Insurance
Commercial auto insurance is meant for cars that are used in a business such as:
- Delivery autos (vans, trucks)
- Cabs, app-hailing cars
- Vehicles owned by an organization for use by employees during working hours
Key features of commercial auto policies include:
- Higher coverage limits: this is because commercial activities pose higher risks than personal ones, so they have higher liability limits to safeguard the company’s properties.
- Employee coverage: anyone driving the vehicle on behalf of the business can be covered under these types of policies.
- Transit risk provision: this policy compensates any loss or damage that may happen to equipment, tools or goods you were carrying when conducting business.
- Fleet insurance: businesses with more than one vehicle can insure them all using a single commercial insurance policy and get discounted premiums.
Nevertheless, commercial motor vehicle insurance is generally more expensive than personal coverage because it provides comprehensive protection.
- Read More: Car Insurance 101: Everything You Need to Know
- Read More: 5 cheap Car insurance Company in USA
How to Decide: Personal vs. Commercial Auto Insurance
Here, however, is a swift guide that will enable you to decide which one to go for:
Personal:
It should be noted that if you only use your vehicle for running of errands and commuting purposes, plus engagement in personal activities, personal auto policy would be appropriate.
Commercial:
For any business use of your vehicle even the occasional ones, commercial auto insurance is probably necessary. Don’t jeopardize your company’s financial stability through insufficient insurance.
My advice though is always when in doubt seek an insurance agent who will assess your needs and suggest the right coverage.
Obtaining a Car Insurance Quote
Irrespective of whether your intentions are personal or commercial, it is always advisable to obtain quotes from different insurers. By so doing, you can be able to compare what different providers offer in terms of rates and coverage options thus helping you find the best bargain. Most insurance companies have made available online tools where you can apply for a quote without much difficulty.
Understanding the basic differences between personal auto insurance and that meant for commercial purposes would help ensure that you get adequate protection required while on transit as well as keeping your business safe.
Conclusion
It is important to have the right auto insurance, for both personal peace of mind and financial protection. By understanding the difference between personal and commercial insurance, you can ensure that you are properly insured.
Even if it’s just for a moment, whenever your vehicle touches on business use err on the side of caution and get commercial auto insurance. Safeguarding your business as well as your personal assets will cost you little.
If any business owner is unsure about their insurance requirements, it is always best to consult with a qualified agent. They can give expert advice and tailor policy to match exactly what you need. Having suitable coverage in place means that you can drive around knowing that whatever comes along, you are prepared for it.
