Motor vehicle-related accidents cost the United States more $44 billion in medical expenses in a single year.
American highways present numerous road-related hazards that lead to hundreds of deaths annually. In thousands of other cases, the extent of bodily harm caused and car damages are immeasurable.
Nothing cautions you for the uncertainty caused by sudden accidents. Such incidences can cause untold heartaches and financial constraints when they occur.
So how well can you prepare for the risk of motor vehicle accidents?
Considering the best insurance solution for your personal car can enhance your preparedness in case of an accident. Most car owners don’t understand the difference between commercial and personal car insurance.
Before sourcing for insurance cover for your car, here is what you should know.
What Is Commercial Auto Insurance?
The confusion around auto insurance relates to the determination of what coverage works for you.
You may have to decide between commercial and personal car insurance for your vehicle before enlisting for coverage.
Such an assessment of the cost of coverage depends on several factors. It would be best if you also determined the purposes of owning such an automobile.
Commercial auto insurance covers cars that operate under a registered company or business.
Any accidents leading to loss qualify for cover under the commercial insurance coverage if the vehicle is a company vehicle. This means that employees, clients, goods, and material on-board such a car qualify for a commercial auto insurance policy.
Commercial auto coverage is not limited to heavy-duty machinery, as many people would presume.
How to Know Your Personal Car Qualifies For Commercial Auto Insurance
Most people end up with the wrong insurance coverage options because they don’t take the time to review their coverage needs.
If you use your car to transport goods or equipment for business purposes, then you qualify for commercial auto insurance. This includes the hauling of heavy, work-related loads.
Commercial auto insurance also covers vehicles driving clients or employees to various destinations.
If you use your car to offer other services at a price, then such an automobile should also be enlisted for commercial auto insurance coverage.
Knowing your vehicles’ core function will see you enlist for the most suitable insurance coverage.
For instance, if you charge customers a fee to ride in your car, you may need to consider having commercial auto insurance. The same should also apply if the vehicle is used to transport other people’s goods at a fee.
Most car owners end up in trouble when claiming compensation. This is after realizing that what they presumed to be the right coverage is erroneous.
Commercial vehicles attract higher liability limits when compared to personal cars. The additional coverage for the goods, persons, and equipment necessitates more comprehensive coverage.
Personal Auto Insurance
Car owners can take up personal auto insurance coverage when using their cars for noncommercial purposes.
Why is it important?
When using your vehicle for functions that aren’t revenue-oriented, you may are still exposed to risks. These may include accidents, risks, and damages.
Non-commercial purposes include the process of commuting to and from work. You may also be using such a car for other leisure-related activities such as traveling.
The personal auto insurance coverage often covers you and two or more of your immediate family members, depending on the size of the car.
Is your personal car in use solely for your own and your family members’ benefit? Then it qualifies for personal auto insurance coverage. This policy covers you against economic losses due to bodily harm or property damages following an accident.
With its own automobile coverage policy, you are also covered from other financial losses accruing from repairs.
The terms of engagement in personal auto insurance include full coverage.
This type of indemnity covers all the damages caused to you and your car. It also covers all the costs you cause to others up to certain liability levels.
You can’t claim compensation if your vehicle is involved in an accident while undertaking commercial ends.
The Two Underlying Factors
The difference between personal auto insurance and commercial auto insurance is on car ownership.
As long as you have a company-owned car, it must be insured under a commercial auto insurance policy.
There must be a consideration for the actual purpose of the car.
Is your vehicle owned with the anticipation of revenue generation? Then it would only fit best under commercial insurance coverage.
Personal auto insurance coverage offers cover for vehicles that serve private purposes.
How Much Does Commercial Auto Insurance Cost?
The cost of commercial auto insurance varies based on various factors.
One such distinct factor is the manufacturer suggested retail price. Cars that are generally expensive will tend to have a higher cost of coverage. Older vehicles with a greater vulnerability to accidents will also tend to have costlier insurance coverage.
Your commercial auto insurer may also charge you less in some instances.
For instance, your cost of coverage may be less if you’re insuring more than one vehicle.
How do you use your vehicle? This question may be an essential determinant when deciding on the actual cost of commercial auto insurance for your car.
Most auto insurance providers assess your level of risk when determining the cost of coverage.
Know the Insurance Needs of Your Vehicle
Insurance coverage is an essential consideration for any car owner.
You don’t want to end up with the wrong insurance coverage plan when you need compensation the most.
You should first seek to understand the difference between commercial and private auto insurance. This must be done before you enlist your personal car for insurance cover.
Are you looking for reliable insurance coverage and consultancy? Contact us for the best services.