If you own a vehicle and you are using that vehicle for business, you may require commercial auto insurance instead of personal auto insurance. There are several factors to consider, but one that always weighs on the mind of the insured is the cost. Which is more expensive, commercial or personal auto insurance? The answer is, “It depends.” However, it may not matter, especially if you are not covered in the event of an accident because you have the wrong type of coverage. It is important to understand both when commercial insurance is necessary and what the potential added costs will be.

 

When It Must be Commercial

 

Each state has their own rules, however, most states, including North Carolina, have general guidelines for when commercial insurance is required for your vehicle. Sometimes you only need to have a commercial insurance policy added to your business policy to cover your employees while they are on the clock. However, if you own a business and a vehicle and you are using your vehicle to transport equipment, drive others as part of your business, or more for business than personal use, you will require commercial insurance coverage. If your vehicle is owned by the business, you most definitely need to have a commercial policy.

 

Cost Comparison

 

Commercial coverage and personal coverage may be comparable in price. However, some factors affecting your commercial coverage may make it quite a bit higher than personal insurance. Much like personal insurance, your personal driving record, as well as the driving records of your driving employees, play a large role in your insurance costs. However, the largest variable that is not involved with personal auto insurance is the driving risk associated with your profession. Truck drivers, food delivery drivers, and other delivery drivers may be considered more of a risk than the painter who drives his own equipment locally to paint a home. Of course, cab drivers and bus drivers may have a higher rate because they are driving others, and therefore must carry insurance to cover their passengers in case something happens. Part of the issue with delivery and truck drivers is they must also insure items in their vehicle that do not belong to them or their company. All of these issues may raise insurance rates. However, getting into an accident and not having the proper insurance will cost much more in the long run.

 

To learn more about insurance coverage for your commercial vehicle, contact the experienced agents at Protective Agency Insurance at 877-739-9367.