Many business owners are unsure of the differences between personal and commercial auto insurance. Some business vehicles are required to have commercial policies while others can benefit from a commercial policy more so than a personal policy. The increase in on-demand car services and delivery drivers draws larger uncertainties between the necessity and benefits of personal and commercial auto policies.
Insuring a commercial vehicle is just as important as insuring a personal vehicle. The coverage type is generally the same – comprehensive, collision, liability, personal injury, uninsured motorists – however, the commercial policy will have to be written with the business name as the “principal insured”. Commercial policies also include specialized coverage that is not offered under personal policies. This coverage can include: trailer interchange coverage, rental reimbursement, hired vehicle covered for renting cars and vans for employees, as well as non-owned vehicle coverage, which covers employees when they use their own vehicles to conduct business. Other than specialized coverage, commercial auto insurance differs from personal auto insurance coverage by having higher liability limit, a tax-deduction benefit, and additional equipment coverage for trucks and other vehicles that carry trailers or machinery.
When deciding if you need commercial auto insurance, you should consider a few things. First, the ownership of the vehicle will determine its needs. All business-owned vehicles require commercial auto policies and some personally owned vehicles may also need commercial coverage depending on its use. Your agent can help determine if your car should have a commercial policy when used for work if you transport equipment, people and/or goods. Second, the make and model of certain vehicles will require a commercial policy. Weight and load capacity are also considered when finding the right policy for your commercial vehicle.
Contact an agent today to discuss commercial vehicle insurance. Our agents will help find a policy that works best for you, your business, and your employees.