Some business owners will readily admit that they’re not sure whether they can get by with personal coverage or they need a commercial auto insurance policy. Your personal auto insurance policy may be able to provide you with enough auto insurance coverage for your business, particularly if you also drive your vehicle for personal use.
But if you require specific commercial auto insurance coverage, including high liability insurance limits, or you transport goods or people, or have other special needs, you’ll likely need commercial auto insurance. That’s useful knowledge in the commercial insurance vs personal coverage debate.
Important factors to consider
Your insurance needs or requirements may weigh heavily on who owns and drives the vehicle. If the vehicle is owned by your business, you’ll probably need a commercial auto insurance policy. But if you’re a sole proprietor, you might only need a personal auto insurance policy. The type of policy you need also depends on how often the vehicle is used and what it’s used for.
The type and weight of the vehicle can be another determining factor. If the vehicle being driven is heavier than a normal size pickup or SUV, like a dump truck, tow truck, or semi truck and commercial trailer, you will obviously require a commercial auto policy. Heavy-duty vehicles can cause a lot more damage if they’re ever involved in an accident, and often require special insurance coverages for the types of exposures commonly faced with owning larger trucks and motor-operated vehicles.
Keep in mind that personal car insurance typically won’t pay to repair damage or treat injuries that were sustained while transporting people or goods for money, or as part of a job description, in part because the liability and property damage risks are simply far too great. Driving a client to a business meeting or grabbing coffee for co-workers waiting at the office is generally covered, but if the vehicle is routinely used to make deliveries, better off having commercial auto insurance.
When deciding on commercial insurance vs personal, the answer involves many mitigating factors as well as answers to several questions, so discuss the issue with your insurance agent.