Anyone who has ever owned a vehicle understands that part of the maintenance of this vehicle includes purchasing and maintaining proper automotive insurance. Most people typically worry about whether full coverage or liability only is needed. However, there are many people who need to determine whether commercial or personal auto insurance is required. This is not nearly as simple as determining how much coverage is needed. There are very defined guidelines regarding whether you require commercial insurance or simply need a personal policy. These guidelines go well beyond whether you own a fleet of commercial vehicles or drive a standard personal vehicle on a regular basis. Read below to learn more about commercial insurance and whether you need to carry it.

 

Commercial Insurance Defined

Commercial auto insurance is insurance that covers a vehicle used for business or commercial purposes. As vague as this seems, there are state regulations to help narrow down the specifics. However, dealing in vague terms for the moment, commercial auto insurance is not much different than personal insurance, except the coverage availability limits are typically much higher, and there is no limit on how many vehicles can be on the policy. Still, the coverage will help make sure you are covered both physically and financially shod your commercial vehicle or personal vehicle be involved in an accident when being used for commercial purposes.

 

One of the main differences between personal and commercial auto insurance is the optional coverage. Personal auto insurance allows you to choose liability coverage only as long as you own the vehicle and do not pay a loan on the vehicle. However, commercial coverage includes both collision and OTC (other-than-collision) coverage no matter the ownership circumstances of the vehicle. Therefore, you have no choice to exclude OTC coverage from commercial auto insurance. Optional coverage is available, however, they include things like Non-owned liability coverage and Hired-auto liability coverage, in which an endorsement provides coverage for a rented or leased replacement vehicle.

 

You Need Commercial Coverage

Now that the difference between personal and commercial insurance has been explained, we answer whether you need commercial coverage for your vehicle. Of course, there are the usual suspects that would require commercial insurance. Anyone who owns a commercial fleet of vehicles would need to cover that fleet with commercial insurance. This includes repair companies, trucking delivery companies, and even sales companies that have company cars for their sales people to drive. Another fairly usual suspect would be a vehicle that is clearly advertising your business, such as a commercially wrapped vehicle used by any driver.

 

Yet, there are some less obvious examples of those who require commercial coverage and how it must be issued. If you own a business and utilize your personal vehicle for business purposes, such as your SUV to cart your painting supplies or handyman supplies for your jobs, you should carry commercial auto insurance. The reason is simple. If you are involved in an accident on the way to or from a job and your materials are damaged, you would not be covered under a personal auto policy. Therefore, to ensure your business property is covered, you are required to carry commercial coverage.

 

In some instances, a company may be required to carry a commercial auto policy for its employees. This type of coverage is used when an employee runs errands or drives to appointments in their personal vehicles while on company time. The employee must be driving for official work purposes. In the event that an accident would occur when the employee is using his or her personal vehicle to run a company errand, the company’s insurance policy for the vehicle would be used to cover damages.

 

In the end, there are many nuances that create a need for commercial auto insurance, above and beyond the typical obvious needs that include commercial fleets of trucks and vans. Even with these basic concepts in place, the laws and requirements are constantly changing as the world of driving is changing. For instance, there are specific requirements that are still being determined for Lyft and Uber drivers, which may be blurring the line between the need for personal and commercial auto insurance.

 

To learn more about commercial auto insurance, contact our team at Protective Agency at (877) 739-9367. Our licensed insurance agents will be happy to answer any questions you have.