Are you looking for ways to protect your company’s fleet from an unforeseen accident? Do you find yourself confused about which type of car insurance is right for your needs? If so, then you need to learn all you can about commercial auto insurance vs personal auto insurance.
As the names would imply, one is focused on protection for business vehicles, the other is focused on protecting your personal cars. It’s important to know the distinction between them and where the line is drawn from “personal” to “commercial”.
See below for an in-depth guide on what you should know regarding commercial and personal auto insurance.
What is Personal Auto Insurance?
Everyone who’s ever driven a car is at least familiar with the idea of personal auto insurance. This is the type of car insurance that covers any accidents or damage that occurs while driving your own personal vehicle, such as:
- Collision coverage from a car accident
- Medical payments from injuries (that were a result of the accident)
- Liability insurance (if you were the one at fault)
- Coverage for those hit by an uninsured motorist
As you might imagine, this type of car insurance policy draws a definitive line between when a car is being used for personal reasons, and when it’s being used for business reasons.
That said, a personal auto insurance policy can provide coverage for those that get in a car accident during their commute to work. If it’s any other situation beyond that, the personal auto insurance policy won’t cover it.
Far too many business owners make the mistake of assuming their personal auto insurance will cover their commercial fleet. If that’s you, then you’ll be sadly mistaken. Your personal auto provider will reject the claim, leaving you to provide all the costs of the accident on your own.
What is Commercial Auto Insurance?
Now that we know what personal auto insurance does and (more importantly) does not cover, let’s talk about commercial auto insurance. What does it apply to?
Commercial auto insurance covers any costs that one of your commercial fleet vehicles would endure. That includes coverage if the fleet car is being driven by one of your employees.
It’s important to know that personal auto insurance will not provide coverage for any business-related commute. Even if you were driving your personal car to transport items to a client, that would still fall under a commercial auto insurance situation.
Personal car insurance doesn’t cover any vehicle that’s used for hauling, towing, or driving your clients/employees anywhere.
There you have it; that’s the distinction. But what does commercial auto insurance provide coverage for? Ironically, it includes a lot of the same coverage as personal auto coverage, such as:
- Coverage on damage and injuries caused by an uninsured motorist
- Medical payments that are a result of a car accident
- Property liability coverage (if your car damages someone’s property)
- Coverage for any bodily injuries
- Comprehensive coverage to protect your vehicles from flooding, fires, and other unforeseen emergencies
Questions to Ask Yourself to Determine Your Needs
You now know the difference between the two. Now all you need is to find the type of coverage(s) that fit your situation. See below for a few questions you can ask yourself if you’re still not entirely sure.
What Type of Vehicle Are You Driving?
This should clear things up. Use the type of vehicle that you’re driving to determine which type of policy is the best fit.
For those of you that are driving sedans, wagons, or SUVs, then a personal insurance policy would be the best fit. It will help you keep the costs of your insurance premiums down as well.
If you’re driving something more heavy-duty, such as a truck or van, then you’ll want to insure with a commercial auto policy. That way, there’s no confusion if you ever need to file a claim.
What Are You Using It For?
As we highlighted earlier, it’s vastly important that you determine what you will be using your vehicle for. If it’s being used for business in any way, commercial auto insurance is the best route to take.
The last thing you want to do is compromise your finances. If you receive a personal auto policy for a car you’re using for business, you risk having to pay all the damages if/when your car is in an accident.
The odds of getting into a car accident are one in 366 for every 1,000 miles that you drive. Don’t put your business at risk.
Who Owns It?
Who owns the car? If the vehicle that you’re searching for coverage for is owned by a company, then there’s no way to invest in personal auto insurance.
If the car is under your name specifically and is being used for personal reasons (not related to business), then it will work like a charm.
Remember, the decision you make today could either harm or save you down the line. Make sure you have the right car insurance for the right amount and the right usage. It will give your business operations more financial security.
Commercial Auto Insurance vs Personal Auto Insurance: Know the Difference
Now that you have seen an in-depth guide discerning the differences between commercial auto insurance vs personal auto insurance, be sure to use this information to your advantage.
Are you looking to learn more about commercial vehicle insurance? If so, then be sure to take some time and read this article for more information.
For more information, give us a call at 919-926-7166 and we will be happy to assist you in any way that we can.