What is Commercial Vehicle Insurance and other Fun Facts?

Vehicle insurance is not always created equal. How a vehicle is utilized plays a significant role in whether the vehicle requires residential or commercial coverage. Even the sole proprietor using his own car to make a delivery here or there may actually require commercial coverage on his otherwise personal vehicle. The fact is, certain elements affect the type of vehicle insurance you should carry. It is important to know the basics before you need the insurance and learn you do not have the appropriate coverage.

The Basics

Before you can determine whether you should have commercial insurance, it is crucial to know what commercial vehicle insurance is. This type of coverage is vehicle insurance on a vehicle owned by a business or used primarily for business purposes. This is not to say that any time you utilize a personal vehicle for business, you need to carry commercial insurance. However, if you own a business and it owns a vehicle, or if you own a business and use your vehicle to conduct business more than fifty percent of the time you drive the vehicle, you may need commercial coverage.   

Furthermore, there is a difference between types of commercial vehicle coverage. Businesses that own vehicles, such as a van, or car, has a certain type of coverage needed due to the likely transport of people and small product. This also applies to many service industries, such as painters, landscapers, and other contractors. Their vehicle is utilized to transport them and their own equipment and therefore requires a more standard commercial insurance. On the contrary, trucking companies that transport merchandise from one location to another or across state lines would require more  encompassing coverage that covers the vehicle, the driver, and the merchandise.

The Uber Question

Commercial coverage is used for commercial vehicles. Vehicles that are commercial vehicles and carry commercial coverage are typically registered as such. Taxis fall into this category quite often. However, with the advent of Uber and Lyft, a new question arises. Uber and Lyft do not require commercial registration for vehicles. As a matter of fact, they expect the drivers are average, everyday people with an average, everyday car, looking to make a couple of extra dollars here and there. When they are on the clock to take fares from Uber or Lyft, they become a cab. Once they are no longer on the clock, they go back to driving a passenger car. Currently, there is no hybrid insurance that covers both commercial and personal uses of a vehicle. The issue arises if and when, an accident or another type of incident occurs while on route to pick up an Uber call. While the passenger is in the vehicle, Uber offers insurance to cover any events. However, once the call comes through to the driver, the driver is now on the clock and is not covered by Uber or his own policy. Until this issue is fixed, Uber drivers during this time are in a category of their own and take a large risk.

To learn more about commercial vehicle insurance and whether your vehicle qualifies, contact the agents at Protective Insurance Agency at (877) 739-9367.