It is common knowledge that in almost all fifty states if you drive a vehicle, you need some type of vehicle insurance. Depending on your ownership of the vehicle, you may need minimum basic coverage, non-owner coverage, or full coverage. This coverage helps pay for damages caused by an accident or act of nature occurs, like a tree limb falling on the roof of your car and causing serious damage. Most of these types of insurance coverages help you if you are using a vehicle for personal reasons. However, when do you need to worry about carrying commercial vehicle insurance instead of personal coverage?

 

The Obvious Reasons

Most people think commercial insurance is only needed for commercial vehicles. For instance, if you own a company and that company owns a vehicle, that vehicle will need to have commercial insurance. A commercial vehicle is rarely if ever, used for personal business. Therefore, there is no other option aside from commercial insurance coverage.

Another obvious example of a time when commercial insurance is required is if you own a fleet of vehicles. A fleet of tractor trailers or commercial vans will be used for commercial purposes. Therefore, they require commercial insurance.

 

Your Business, Your Car

While the above reasons are the obvious reasons one would need commercial vehicle insurance, they are not the only circumstances such coverage is required. The fact is, personal insurance will not cover you or your vehicle if you are in an accident while on the job. This explanation requires a bit more detail.

If you own a business, such as a marketing company, you will likely need to go out on sales calls, meetings, and even transport items to your clients. You will likely do all of this in the same car you use to drive your children to and from school, your family on vacation, and your pet to the vet. When you are driving for personal reasons in that vehicle, personal insurance would be perfectly acceptable, however, as soon as you are transporting commercial products or driving for the purposes of completing a job or obtaining a client, you are no longer using a personal vehicle. You are now using a commercial vehicle. Therefore, you must carry commercial insurance.

The good news is, you do not need to carry both personal and commercial insurance for your person cars that are also company vehicles. Your commercial policy will cover your vehicle no matter when it is involved in an accident.

Another option is to purchase commercial vehicle insurance that covers your employee’s cars when they are on the clock. For instance, if your employees drive their personal automobiles to client sites or professional meetings, they are driving for a business purpose. They are not the owner of the business; therefore, they will not carry commercial insurance on their vehicles. However, your company can purchase a policy that will cover them and their vehicles if an accident occurs while on company time and driving for business purposes.

 

The Unknown

There is a new area that is keeping the insurance industry on its toes. This is the area of Uber and Lyft drivers. You would think that Uber and Lyft drivers would require commercial vehicle insurance. However, commercial coverages are different for taxi type vehicles than they are for other commercial vehicles. Also, the language in many policies indicates that taxis are used for the sole purpose of transporting people for business.

An Uber or Lyft driver uses their vehicles for personal and taxi type transportation. Moreover, these drivers are independent contractors for a specific company when on the clock. Therefore, the insurance industry is still working out the details of the type of coverage needed for Uber and Lyft transportation as well as who should carry the necessary coverage: the driver or the employing company.

It is clear that no matter the details of the policy or who maintains it, Uber and Lyft drivers require commercial vehicle coverage, at least while operating as an Uber or Lyft driver. When utilizing the vehicle as a personal vehicle, personal coverage will be sufficient. However, as stated above, both types of policies are not necessary. Therefore, it is likely a commercial policy would be the best course of action for anyone driving an Uber or Lyft vehicle.

 

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