When you hear the term, “commercial auto insurance,” you may think that it refers to a type of insurance that only applies to people who do business with their vehicles, like taxicab drivers, tow truck drivers, or pizza delivery drivers. While these people could benefit from commercial auto insurance, so could many others–even your Aunt Wanda who makes a living baking and delivering her famous homemade donuts! If she could use a commercial auto policy, could you? It’s time to get the facts and learn more about the differences between personal and commercial auto insurance!
Difference #1: How the vehicle is used
In general, a commercial auto policy is a good idea if your vehicle is used in tasks related to your occupation or business (other than commuting). This type of policy is used to cover cars, trucks, or vans used to conduct business. And if you have employees that plan on driving the car in question, a commercial policy is especially important! Vehicles like a plumber’s van, courier’s car, ice cream truck, or landscaping truck could all benefit from the coverage that comes with a commercial auto policy.
So what if you use your personal vehicle to drive to and from work? Most of us do! In the event you’re in a car accident while driving to work (without using your car for commercial purposes), the accident would likely be covered under your personal auto policy.
Difference #2: The number of drivers and vehicles
Personal auto policies are generally intended to cover you as a primary driver, your driver, and your relatives who live in your household. Your personal policy can cover multiple drivers and cars, but typically no more than 5 of each. A commercial policy, on the other hand, is meant for a business that may need coverage for 10, 15, or more drivers (even if they only drive occasionally) and could be used to insure one car or a whole fleet of cars!
Difference #3: The level of coverage offered
Typical, everyday car insurance policies were created with the average driver in mind and do not offer the same level of liability coverage as commercial policies. Business owners, large or small, have a lot at stake when out on the road! A commercial policy is designed to protect their unique financial situation. Personal car insurance policies and commercial policies DO offer similar coverages, and you’ll likely recognize some of the same insurance lingo used for both types of policies. Terms like exclusions, deductible, property damage liability, bodily injury liability, comprehensive, and collision coverage will probably pop up in your search. While both types of policies offer similar coverages, the limits you need or want to protect your business and employees may be very different.
A limit is the maximum amount of money your insurance company will pay in the event of an auto accident and is illustrated by two numbers: limit per person/limit per accident.
Instead of offering different limits for bodily injury and property damage, many insurance companies offer one liability limit, dubbed a combined single limit, that covers both bodily injury and property damage claims. This limit can range anywhere from $100,000 to millions of dollars!
Difference #4: How the policy is written and rated
Because commercial policies were created with different needs in mind, they’re written and rated differently than personal auto policies. The information you’ll be asked to provide for a quote may also vary. When getting your quote, it may be helpful to have the following info on hand to speed up the process: your personal information, a record of company insurance, information about the drivers in your company (driver’s license numbers included), a list of makes, models, and years of all company vehicles, and a description of how your vehicles are used like:
- Whether your vehicles transport hazardous materials
- Whether they transport people
- How far they are driven and how often
- How you and your employees use these vehicles
If you make money while driving your vehicle, talk to an insurance agent to learn more about commercial auto insurance. Give us a call at 1-877-GO-DIRECT (1-877-463-4732) and get a quote for commercial auto insurance from Direct Auto & Life Insurance. Start customizing your commercial policy to fit the needs of your business and its employees today!
*Commercial auto insurance produced by Right Choice Insurance Agency, Inc. and Direct General Insurance Agency, Inc. d/b/a Direct Auto & Life Insurance as agents for Titan Indemnity Company, a Nationwide Insurance Company & its affiliates. Not available in all stores. Pay plans, discounts and coverages subject to terms and conditions.
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